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Technology and Communication Innovations Reduce Unemployment Insurance Payment Errors

September 14, 2017

This morning, the US Department of Labor released its weekly report on initial claims for unemployment insurance, reporting that the 4-week moving average (seasonally adjusted) had jumped to the highest level for this average since August 2016. Hurricanes Harvey and Irma undoubtedly affected the numbers, reminding us of the important role that the Unemployment Insurance (UI) program will play in the recovery from those storms. Unfortunately, like many other complex, government programs, the UI program has a history of payment errors, both in terms of overpayments and underpayments. Justin Bullock and Robert Greer, assistant professors at the Bush School of Government and Public Service at Texas A&M University, have taken a close look at the US Department of Labor’s efforts to reduce their payment error rates and report good news both for recipients and taxpayers.

Bullock and Greer found that while there are always trade-offs between timeliness, cost, and complete accuracy, the Department of Labor has been successful at reducing the rate of improper UI payments by using information technology and communication innovations targeted at recognized sources of error.

“The Unemployment Insurance Program is one of the earliest leaders among federal programs in developing systematic empirical evidence concerning improper payments and ways to decrease them. That attention to data has really paid off. Similar strategies could benefit other government payment programs and save taxpayers money,” says Bullock.

Bulllock’s and Greer’s analysis is explained in a policy brief titled, “IT Can Be Done: Reducing Payment Errors in Unemployment Insurance,” published by the Mosbacher Institute for Trade, Economics, and Public Policy. The article can be found on-line at http://bush.tamu.edu/mosbacher/takeaway/.

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