Association for Public Policy Analysis & Management

Panel: The Effectiveness of U.S. Employment Policy during the Great Recession

(Employment and Training Programs)

At the end of 2007, the U.S. economy entered the Great Recession, perhaps the worst recession since the Great Depression. During the recession, the national unemployment rate increased from about 5 percent at the end of 2007 to a peak of nearly 10 percent at the end of 2009, and the number of new Unemployment Insurance (UI) claims increased from 7.7 million in 2007 to 13.9 million in 2009. To facilitate the economic recovery, Congress passed the American Recovery and Reinvestment Act of 2009 (ARRA), a $787 billion stimulus package that provided more than $12 billion to the public workforce system, including: $7.5 billion for the administration and modernization of the UI system; $3.2 billion to enhance the capacity of Workforce Investment Act (WIA) training programs to serve adult, dislocated workers, and youth; $400 million to support reemployment services; and $750 million to support employment and training programs in high-growth and emerging industries. These funds played an important role in facilitating the quick response of the U.S. workforce system to the economic downturn. State workforce agencies used these funds to provide timely UI relief to unemployed workers, enhance the capacity of local employment offices to provide reemployment and training services, improve program administration and quality of services, and implement new workforce development strategies. The objective of this panel is to shed light on the role of U.S. employment policy during the Great Recession and present quantitative evidence on the effectiveness of employment and training programs during this period. The panel consists of four papers that cover a wide range of programs during the recession: 1) "Public Workforce Programs during the Great Recession" – Provides a detailed account of the operations of federally-funded workforce programs and assesses the role of additional federal funding in enhancing program capacity and quality of services. 2)"The Effectiveness of Reemployment Programs during the Great Recession: Experimental Evidence from Three States" – Presents experimental evidence on the effectiveness of a wide range of reemployment programs in helping displaced workers to enhance their job search outcomes and in reducing the moral hazard of UI. 3) "Job Rationing in Recessions: Evidence from Work-Search Requirements" – Examines whether changes in state UI work search requirements improved the job search intensity and outcomes of displaced workers. 4) "From Unemployment to Self-Employment: The Role of Self-Employment Training" – Provides experimental evidence on the value of offering self-employment training to unemployed workers through the public workforce system.