NCPA - National Center for Policy Analysis


July 12, 2007

States have the opportunity to save millions of dollars and promote the overall well-being of their unemployed workers by implementing best practices in their Unemployment Insurance (UI) programs, says the American Institute for Full Employment (AIFE).

UI is an often overlooked, yet critical program for employers and employees.  UI policy decisions involve not only significant expenditures in the economy, affecting the business climate and economic development, but also the financial, mental and physical well-being of the unemployed.  In designing their UI programs, federal law allows states substantial flexibility that is too rarely used, says AIFE.

A new report from AIFE surveys the best five states' performance and highlights common areas for evaluation for all states.  On average, unemployment insurance claimants in the best five states found their way off unemployment insurance nearly one month faster and exhausted their benefits at approximately half the rate of the average state.

Best five states -- duration (January 2006 to December 2006):

  • Average number of weeks a claimant receives benefits during a claim: Georgia, 11.0; North Dakota, 11.0; Alabama, 11.3; South Dakota, 11.4; and Idaho, 11.6.
  • The best five average was 11.2 weeks, while the U.S. average was 15.3 weeks.

Best five states -- exhaustion rate (January 2006 to December 2006):

  • Percentage of UI claimants who exhaust their benefits: South Dakota, 11.8 percent; New Hampshire, 15.9 percent; Vermont, 18.7 percent; Hawaii, 21.4 percent; Kentucky, 22.3 percent.
  • The best five average was 18.0 percent; the U.S. average was 35.3 percent.

Comparing UI taxes per employee, employers in the best five states spend less than one third as much as the average U.S. employer:

  • Average annual amount of UI taxes paid by an employer per employee (July 2005 - June 2006) - South Dakota, $67.97; Arizona, $102.09; Louisiana, $106.47; New Hampshire, $117.70; Mississippi, $122.59.
  • The best five average was $103.36; the U.S. average was $306.98.

Source: "Progress Report: The Best Five States Unemployment Insurance," American Institute for Full Employment, May 2007.


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