Demonstration and Evaluation of the Short-Time Compensation Program in Iowa and Oregon

Susan Houseman, W.E. Upjohn Institute
Frank Bennici, Westat
Susan Labin, Social Dynamics
Katharine G. Abraham, University of Maryland
Christopher J. O'Leary, W.E. Upjohn Institute
Richard Sigman, Westat


Short-time compensation (STC) is an optional program within some state unemployment insurance (UI) systems that allows employers experiencing a temporary reduction in business to lower the average hours of employees in lieu of laying them off. Employer use of the STC option has been low in states with STC programs. We conducted demonstrations in Iowa and Oregon to evaluate the effectiveness of several interventions designed to increase employer awareness and use of STC, including disseminating information about STC to specific employers (members of the “treatment” group) over a 12-month period. The main findings support the hypothesis that lack of awareness is a major barrier to STC take-up and that informational campaigns can significantly increase awareness and use of the STC option.