ALABAMA ALASKA ARIZONA ARKANSAS CALIFORNIA COLORADO CONNECTICUT DELAWARE DISTRICT OF COLUMBIA FLORIDA GEORGIA GUAM HAWAII IDAHO ILLINOIS INDIANA IOWA KANSAS KENTUCKY LOUISIANA Implementation of the MAINE MARYLAND MASSACHUSETTS MICHIGAN MINNE- SOTA MISSISSIPPI MISSOURI MONTANA NEBRASKA NE- American Recovery and Reinvestment Act: VADA NEW HAMPSHIRE NEW JERSEY NEW MEXICO NEW YORK NORTH CAROLINA NORTH DAKOTA OHIO OKLA- HOMA OREGON PENNSYLVANIA PUERTO RICO RHODE ISLAND SOUTH CAROLINA SOUTH DAKOTA TENNESSEE TEXAS UTAH VERMONT VIRGINIA WASHINGTON WEST Workforce Development and VIRGINIA WISCONSIN WYOMING ALABAMA ALASKA ARIZONA ARKANSAS CALIFORNIA COLORADO CON- Unemployment Insurance ProvisionsNECTICUT DELAWARE DISTRICT OF COLUMBIA FLORIDA GEORGIA GUAM HAWAII IDAHO ILLINOIS INDIANA IOWA KANSAS KENTUCKY LOUISIANA MAINE MARYLAND MASSACHUSETTS MICHIGAN MINNESOTA MISSISSIPPI MISSOURI MONTANA NEBRASKA NEVADA NEW HAMP- SHIRE NEW JERSEY NEW MEXICO NEW YORK NORTH FINAL REPORT CAROLINA NORTH DAKOTA OHIO OKLAHOMA OREGON PENNSYLVANIA PUERTO RICO RHODE ISLAND SOUTH CAR- OLINA SOUTH DAKOTA TENNESSEE TEXAS UTAH VER- October 2012 MONT VIRGINIA WASHINGTON WEST VIRGINIA WISCON- SIN WYOMING ALABAMA ALASKA ARIZONA ARKANSAS CALIFORNIA COLORADO CONNECTICUT DELAWARE DISTRICT OF COLUMBIA FLORIDA GEORGIA GUAM HAWAII IDAHO ILLINOIS INDIANA IOWA KANSAS KEN- TUCKY LOUISIANA MAINE MARYLAND MASSACHUSETTS MICHIGAN MINNESOTA MISSISSIPPI MISSOURI MONTANA NEBRASKA NEVADA NEW HAMPSHIRE NEW JERSEY NEW MEXICO NEW YORK NORTH CAROLINA NORTH DAKOTA OHIO OKLAHOMA OREGON PENNSYLVANIA PUERTO RICO RHODE ISLAND SOUTH CAROLINA SOUTH DAKOTA TENNESSEE TEXAS UTAH VERMONT VIRGINIA WASHING- TON WEST VIRGINIA WISCONSIN WYOMING ALABAMA ALASKA ARIZONA ARKANSAS CALIFORNIA COLORADO CONNECTICUT DELAWARE DISTRICT OF COLUMBIA FLORI- DA GEORGIA GUAM HAWAII IDAHO ILLINOIS INDIANA SUBMITTED BY: IOWA KANSAS KENTUCKY LOUISIANA MAINE MARYLAND Center for Employment Security Education and Research (CESER) MASSACHUSETTS MICHIGAN MINNESOTA MISSISSIPPI MISSOURI MONTANA NEBRASKA NEVADA NEW HAMP- National Association of State Workforce Agencies (NASWA) SHIRE NEW JERSEY NEW MEXICO NEW YORK NORTH CAROLINA NORTH DAKOTA OHIO OKLAHOMA OREGON PROJECT CO-DIRECTORS: PENNSYLVANIA PUERTO RICO RHODE ISLAND SOUTH CAR- Burt S. Barnow, George Washington University OLINA SOUTH DAKOTA TENNESSEE TEXAS UTAH VER- MONT VIRGINIA WASHINGTON WEST VIRGINIA WISCON- Richard A. Hobbie, NASWA SIN WYOMING ALABAMA ALASKA ARIZONA ARKANSAS CALIFORNIA COLORADO CONNECTICUT DELAWARE PROJECT MANAGER: DISTRICT OF COLUMBIA FLORIDA GEORGIA GUAM HAWAII IDAHO ILLINOIS INDIANA IOWA KANSAS KEN- Yvette Chocolaad, NASWA TUCKY LOUISIANA MAINE MARYLAND MASSACHUSETTS MICHIGAN MINNESOTA MISSISSIPPI MISSOURI MONTANA AUTHORS: NEBRASKA NEVADA NEW HAMPSHIRE NEW JERSEY NEW Burt Barnow MEXICO NEW YORK NORTH CAROLINA NORTH DAKOTA OHIO OKLAHOMA OREGON PENNSYLVANIA PUERTO Jing Cai RICO RHODE ISLAND SOUTH CAROLINA SOUTH DAKOTA Yvette Chocolaad TENNESSEE TEXAS UTAH VERMONT VIRGINIA WASHING- TON MASSACHUSETTS MICHIGAN MINNESOTA MISSISSIPPI Randall Eberts MISSOURI MONTANA NEBRASKA NEVADA NEW HAMP- Richard Hobbie SHIRE NEW JERSEY NEW MEXICO NEW YORK NORTH CAROLINA NORTH DAKOTA OHIO OKLAHOMA OREGON Joyce Kaiser PENNSYLVANIA PUERTO RICO RHODE ISLAND SOUTH CAR- Tara Smith OLINA SOUTH DAKOTA TENNESSEE TEXAS UTAH VER- John Trutko MONT VIRGINIA WASHINGTON WEST VIRGINIA WISCON- SIN WYOMING ALABAMA ALASKA ARIZONA ARKANSAS Wayne Vroman CALIFORNIA COLORADO CONNECTICUT DELAWARE Stephen Wandner DISTRICT OF COLUMBIA FLORIDA GEORGIA GUAM HAWAII IDAHO ILLINOIS INDIANA IOWA KANSAS KEN- TUCKY LOUISIANA MAINE MARYLAND MASSACHUSETTS (GRANT #MI19159-09-60-A-11) MICHIGAN MINNESOTA MISSISSIPPI MISSOURI MONTANA NEBRASKA NEVADA NEW HAMPSHIRE NEW JERSEY NEW MEXICO NEW YORK NORTH CAROLINA NORTH DAKOTA OHIO OKLAHOMA OREGON PENNSYLVANIA PUERTO RICO RHODE ISLAND SOUTH CAROLINA SOUTH DAKOTA JQ TENNESSEE TEXAS UTAH VERMONT VIRGINIA WASHING- CESER TON WEST VIRGINIA WISCONSIN WYOMING ALABAMA ALASKA ARIZONA ARKANSAS CALIFORNIA COLORADO CONNECTICUT DELAWARE DISTRICT OF COLUMBIA FLORI- DA GEORGIA GUAM HAWAII IDAHO ILLINOIS INDIANA IOWA KANSAS KENTUCKY LOUISIANA MAINE MARYLAND MASSACHUSETTS MICHIGAN MINNESOTA MISSISSIPPI ACKNOWLEDGMENTS This report was prepared for a grant awarded to the National Association of State Workforce Agencies (NASWA) by the Employment and Training Administration of the U.S. Department of Labor (USDOL). The success of this project depended on the efforts of many. The most notable contributions were made by the over two hundred state and local workforce development and Unemployment Insurance (UI) officials who, in the midst of the Great Recession and tremendous workloads, provided their insights, experiences, and data to the research team, thereby ensuring documentation of the workforce system’s response to this major economic event in our country’s history. We received valuable input and guidance from Wayne Gordon of the Employment and Training Administration, USDOL, who not only served as project officer but also initiated the study when the Recovery Act provisions became law. Wayne ensured we could tap into the knowledge and valuable work of other USDOL staff members who deserve thanks and acknowledgement, including Scott Gibbons, Anita Harvey, Russell Saltz, Jonathan Simonetta, Ryan Sutter, and Susan Worden. A team of researchers was involved in gathering qualitative information from states and localities for the report, by conducting workforce program site visits or UI teleconference interviews. Researchers who conducted site visits include: Burt S. Barnow (George Washington University), Lauren Eyster (The Urban Institute), Martha A. Holleman (Capital Research Corporation), Joyce Kaiser (Capital Research Corporation), Christopher T. King (Ray Marshall Center, LBJ School of Public Affairs, The University of Texas at Austin), Fredrica Kramer (Capital Research Corporation), Erin McDonald (The Urban Institute), Dan O’Shea (Ray Marshall Center), Tara C. Smith (Ray Marshall Center), Juan Pedroza (The Urban Institute), and John Trutko (Capital Research Corporation). Yvette Chocolaad (NASWA), Richard A. Hobbie (NASWA), and Wayne Vroman (The Urban Institute) conducted the UI teleconference interviews. Randall Eberts (W.E. Upjohn Institute for Employment Research), Stephen A. Wandner (The Urban Institute and W.E. Upjohn Institute), and Jing Cai (W.E. Upjohn Institute) used administrative data from USDOL’s reporting system to create the Public Workforce System Dataset which is the basis for the quantitative analysis and discussion presented in Chapter 9. Primary authors by chapter include: Chapters 1and 2—Burt Barnow; Chapter 3—John Trutko, with Barnow; Chapter 4—Joyce Kaiser; Chapter 5—Tara Smith; Chapter 6—Stephen Wandner; Chapter 7—Joyce Kaiser; Chapter 8—Yvette Chocolaad and Wayne Vroman, with Richard Hobbie; Chapter 9—Randall Eberts and Stephen Wandner; Chapter 10—John Trutko and Burt Barnow; Appendix A—Joyce Kaiser; Appendix B—Jing Cai, Randall Eberts, and Stephen Wandner. Several NASWA staff assistants supported the project, including John Quichocho, Benjamin Fendler, Gina Turrini, and Mariann Huggins. Ben Jones (W.E. Upjohn Institute) was editor. ii COMMON ACRONYMS AND ABBREVIATIONS ARRA: American Recovery and Reinvestment Act, or Recovery Act DW: dislocated worker ES: Employment Service ETA: Employment and Training Administration, USDOL FTE: full-time equivalent LWIA: local workforce investment area NASWA: National Association of State Workforce Agencies TANF: Temporary Assistance for Needy Families program UI: unemployment insurance USDOL: U.S. Department of Labor W-P: Wagner-Peyser Act WIA: Workforce Investment Act WIB: workforce investment board iii iv EXECUTIVE SUMMARY Introduction and Background At the end of 2007, the U.S. economy was hit with the most severe recession since the Great Depression, as the unemployment rate rose from 5 percent in December of that year to a peak of 10 percent in October 2009 before declining to 7.8 percent in the last two months of 2012. In response, Congress enacted the American Recovery and Reinvestment Act (ARRA) in February 2009 to invest in the nation’s social and physical infrastructure and to spur economic activity. U.S. Department of Labor (USDOL) programs were a major part of the Recovery Act. At the time of the bill’s passage, the USDOL’s Recovery Act funding was estimated at $66 billion out of a total departmental budget of $435 billion. The $66 billion share from the USDOL ranked third behind funding through programs of the Department of Health and Human Services and the Department of Education. Actual USDOL program funding was greater than these early estimates, however—partly because the recession was deeper and longer than anticipated, which increased the actual outflow of unemployment insurance (UI) funds, but in larger part because the UI provisions were extended numerous times in subsequent recession-era legislation. As shown in Table ES.1, the Recovery Act added $2.1 billion (about 77 percent) to the Department of Labor’s Program Year 2009 appropriations for the Workforce Investment Act (WIA) Adult, WIA Dislocated Worker, and Wagner-Peyser Act programs to provide additional workforce services to eligible workers. In addition, as shown in Table ES.2, at the time of passage it was estimated the Recovery Act would add $45 billion for benefits and system improvements for the UI system. As was noted, these UI estimates were later revised upward. In the end, combined with outlays from subsequent UI benefit extensions,