Serving the Unemployed: Do More Generous Social Insurance Programs Provide Better Quality Service?

Abstract

The role and capacity of public administration in contributing to economic security is an increasingly important question. More generous social welfare programs may have greater capacity to insure households against risk, but those programs can effectively provide economic security only to the extent that public organizations deliver benefits promptly and properly to families in need. Administrative performance matters. Given that governments with more generous social programs have demonstrated social welfare to be a priority, are those governments also more likely to put effort towards better administration of welfare programs? This question is addressed here using administrative performance data from U.S. state-level unemployment insurance programs, from 2002-2015. Evidence points to a positive association between generosity and administrative quality: more generous states make fewer administrative errors and that relationship is driven by their making fewer underpayments. If unemployment insurance replacement rates reflect an institutionalized commitment to more generously protecting individuals from economic insecurity, that commitment is also evident in the types of administrative errors agents make.