New Paper Explores the Employment Service and Unemployment Partnership

A new working paper by the Upjohn Institute traces the origin and evolution of the partnership between the employment service and unemployment insurance programs in the United States.  The paper examines the objectives of the framers of the Wagner-Peyser and Social Security Acts that established these programs. Authors, David E. Balducchi and Christopher J. O’Leary, analyze early actions of the architects of social insurance to facilitate cooperation between the two programs to meet economic exigencies, grapple with political cronyism, and surmount legal barriers.

The paper also discusses factors that caused changes in the employment service–unemployment insurance partnership over time. Specifically, reasons for the erosion in cooperation starting in the 1980s, and why ever since there has been a continuous decline in service availability.

Reviewing evidence on the effectiveness of in-person employment services for unemployment insurance beneficiaries, the authors suggest ways to revitalize the employment service–unemployment insurance partnership. We explore the source of Wagner-Peyser Act funding, how it was formalized, then eroded, and how it can be renewed.

Download working paper here.