Association for Public Policy Analysis & Management

Short-time compensation (STC), also known as work sharing, is an optional program within some state unemployment insurance (UI) systems. Under STC, employers experiencing a temporary reduction in business reduce employees’ average hours in lieu of laying off workers, and affected workers receive pro-rated UI benefits. Although research indicates that widespread use of such programs in Europe and Japan significantly mitigated unemployment during the last global recession, the program has been little used in the United States. Lack of awareness among employers about the STC program has long been hypothesized as a reason for low employer take-up. In this study, funded by the U.S. Department of Labor, we examine the effects of informational campaigns in two states, Iowa and Oregon, on awareness and use of STC. We use a random-controlled trial (RCT) study design in Iowa and RCT and quasi-experimental designs in Oregon during a 12-month intervention and a 12-month follow-up period. We estimate that modest expenditures on distributing information about STC to employers approximately doubled their awareness of the program in both states and, in Oregon, increased take-up by more than 40 plans, representing a 70 to 140 percent increase in the two Oregon study areas, during the five quarters following the start of interventions. Our findings offer lessons to other STC states and, more generally, point to the potential importance of informational campaigns for government programs.