Administrative processes shape unemployment insurance access

How might administrative processes shape access to the unemployment insurance (UI) system? Earlier work by the Federal Reserve Bank of Minneapolis shows that many unemployed workers do not receive UI. A growing body of research finds that administrative burdens, or frictions individuals experience when they seek to interact with public programs and services, can have important impacts on the take-up of these programs.

Existing studies specifically examining administrative burdens in the UI system highlight how hassles and information gaps contribute to low levels of access. In this article, we build upon this emerging body of work by documenting complexities and variation in the UI application process using hand-collected data from all 50 states and Washington, D.C. We also look into how administrative burdens may impact certain groups of individuals. This analysis aligns with work by the Minneapolis Fed’s Community Development and Engagement team to inform leaders about labor market policies and programs that help shape economic outcomes for low- and moderate-income people and communities.

UI application processes differ across states

In the United States, an unemployed worker who applies for UI, which is administered at the state level, must submit an initial claim, or application, providing personal and employment information that the state then reviews to determine the worker’s eligibility and benefit level. To learn what this process entails for workers, in mid-2024 our team collected data on UI application procedures for all 50 states and Washington, D.C. We systematically examined states’ UI websites to compare their application procedures and also phoned their UI offices to gauge the accessibility of applicant assistance.

Examining unemployment insurance

This article is the third in Community Development and Engagement’s series examining unemployment insurance (UI) policies and their impact on low- and moderate-income workers. Our first article provides an overview of the purpose and scope of the series and our second article explores state variations in UI benefits and access.

Our data-collection efforts show that although UI applications largely ask similar questions, the precise content differs across states. For example, Delaware’s form appears to ask claimants about child support, while Oregon’s asks about Christmas tree harvest work, and Arkansas’ asks about drug tests. The methods of application also differ across states. We found that claimants can apply online in all but one state (Vermont). In four states, the only way to apply for UI is online. Phone applications are the second-most commonly available method, available in 38 states. Roughly 10 states provide an in-person option, and three allow a mail or fax option.

Online UI applications carry complexities

When created with an emphasis on the ease of use for claimants, online applications can lead to a higher number of accurate and complete filings and increased claimant trust in UI programs. Many states are currently modifying their online applications to promote access to UI.

However, at present, many states’ online applications can be difficult for certain claimants to access. One of the top barriers for online UI applications is limited mobile accessibility, which may especially affect individuals who are low- or moderate- income or live in rural areas, due to greater smart phone dependency and less broadband access among those populations. Mobile-friendly online UI applications see broad use in the states that provide them. In Minnesota, which has a mobile-friendly online UI application, roughly 60 percent of initial UI applications and 70 percent of continued weekly claims are submitted via a mobile device.^*

Another challenge can be language accessibility. Our examination of online UI applications reveals that about 20 states provide the online UI initial claims form only in English. Just seven states provide the form in a language other than English and Spanish. Combining our hand-collected information on online application languages by state with data from the U.S. Census Bureau’s American Community Survey on languages spoken at home by state, we find that about 10 percent of unemployed Americans would be unable to access an online UI form in their primary language. Fortunately for these individuals, other options such as phone assistance, Google Translate, and reference documents are available.

In addition, language-accessibility laws help make sure non-English-speaking individuals have access to support throughout the UI application process. Federal law requires that any language-assistance services, whether oral interpretation or written translation, are accurate, provided in a timely manner, and free of charge. Relevant state laws also come into play. For example, New York requires translation of all public services into the top 12 most commonly spoken non-English languages in the state. In Minnesota, agencies involved in providing information or services to the public must employ enough bilingual persons to ensure provision of information and services in the language spoken by a substantial number of non-English-speaking people.

Even for applicants who can reach and read online UI applications, the process can be complicated. States are making changes to improve website navigation, incorporate plain language, and make user interfaces more intuitive.

Limited hours could also pose a challenge for online applicants. In our examination of online applications, we found that 16 states have limited hours during which claimants can submit their forms online, as shown in Figure 1. For example, Minnesota’s online application is only available from 6:00 a.m. to 8:00 p.m. Sunday through Friday, in part due to legacy IT systems, though the state has been working to reduce that closure time. Wisconsin’s application is not available from 3:00 p.m. Saturday to 9:00 a.m. Sunday.

Phone assistance varies

Individuals who face challenges with UI applications may need to call state help lines for assistance. To understand the accessibility of these help lines, we called each state’s help line and recorded how long it took to reach a human who could answer questions. We made the phone calls between 1:00 p.m. and 3:00 p.m. local times on Wednesdays and Thursdays during the weeks ending August 3 and August 10, 2024, where possible, to standardize the process.

We selected these days and times because they were listed as low-call-volume times on some state websites. In the weeks when we called, levels of initial UI claims were lower than in 87 percent of previous weeks on record. As shown in Figure 2, during these likely low-call-volume times we found that 14 states had wait times of less than 10 minutes to reach a human. Another 11 states had wait times of 10 to 30 minutes. The remaining half of states required a wait of longer than half an hour or did not have a human accessible.

Impacts of UI application processes

To understand how administrative burdens associated with the UI application process might be affecting individuals, we analyzed data from the U.S. Census Bureau’s Current Population Survey Unemployment Compensation Supplement. These data ask individuals who were not working but had been employed in the previous 12 months and who did not apply for UI why they did not apply. The two response categories of “Didn’t know about unemployment compensation or how to apply” and “Did not finish application” are especially relevant for understanding the importance of administrative burdens.

Figure 3 presents the results of our analysis. We combined related small categories, such as those regarding administrative burdens, and pooled surveys from 2018 and 2022 to increase the sample size for the smaller categories. As shown in gold in the figure, we found that only 3.1 percent of individuals who did not apply for UI cited explanations related to administrative burdens as their main reason for not applying. On its face, this result suggests a fairly minor impact of administrative burdens in the UI system.

However, even though the share of respondents citing administrative burdens as reasons for not applying is fairly small, so is the share of respondents who actually applied for UI. Only about 19 percent of individuals in our sample who were not working but were employed in the previous 12 months applied for UI. If individuals who cited administrative-burden-related reasons all applied for UI, UI applications would increase by 13 percent, a nontrivial amount. Additionally, it’s possible that administrative burdens could lead to incorrect beliefs about eligibility or other factors that respondents listed as reasons for not applying. For example, individuals might believe they are ineligible because the application language is confusing or because they are unable to obtain accurate information about UI. Administrative burdens may therefore have a potentially larger role in deterring UI receipt.

The impact of administrative burdens, even if modest on the whole, may also be larger for some groups of individuals. Figure 4 shows the educational attainment and racial groupings of respondents who did not apply for UI, broken down by the reasons they did not apply, as well as of respondents who did apply for UI. Respondents citing administrative-burden-related reasons for not applying had lower levels of education (55.5 percent had no college education) and were less likely to be White (at 40.4 percent) than respondents in any other category in the figure. Administrative burdens thus appear to disproportionately affect those with less education and those who are not White, which makes them a potential contributor to observed gaps in UI take-up among eligible unemployed workers.

More research is needed to understand the parts of the UI application process that are most burdensome for applicants, how those administrative burdens affect potential applicants, and which types of individuals are most affected by the burdens. Further study of the topic will help policymakers modify the existing UI system to better serve all potential UI recipients, including low- and moderate-income individuals, whose economic well-being the Minneapolis Fed’s Community Development and Engagement team works to advance.

Endnote

* Numbers are from email correspondence between the author and the Minnesota Department of Employment and Economic Development in December 2024.