The Effects of Eliminating the Work Search Requirement on Job Match Quality and Other Long-Term Employment Outcomes

We exploit data from the 1986–87 Washington Alternative Work Search experiment (merged with nine years of follow-up administrative wage records) to estimate the causal effects of eliminating the unemployment insurance (UI) work search requirement (WSR) on duration of nonemployment, tenure with first post-claim employer, number of post-claim employers, long­ term earnings, employment, and hours worked. For UI claimants as a whole, we find that eliminating the WSR had little influence, either positive or negative, on long-term post-claim outcomes. In contrast, for permanent job losers, we find strong evidence that eliminating the WSR had a negative effect on employment outcomes, resulting in a longer time to reemployment, lower earnings, and a shorter duration of tenure with first post-claim employer. For claimants who were not permanent job losers, eliminating the WSR resulted in more UI benefit payments and longer unemployment durations, but made no difference for their employment outcomes. We conclude that, in addition to reducing moral hazard associated with UI, the WSR is an important policy for improving the long-term employment outcomes of permanent job losers. JEL classification: C21, C93, I38, J18, J24, J38, J64, J65, J68