A Study of the Self-Employment Assistance Program: Helping Unemployed Workers Pursue Self-Employment

“Individuals who lose their jobs may have the skills and desire to start their own businesses. Some states have taken action to help unemployed workers create their own jobs by establishing Self-Employment Assistance (SEA) programs, which allow Unemployment Insurance (UI) eligible individuals who meet SEA program requirements to receive a weekly self-employment allowance while they are setting up their businesses. This allowance is equal in amount and duration to regular UI benefits. SEA program participants are also exempted from actively seeking wage and salary jobs so they can devote their energies to self-employment activities while they receive SEA allowances.…The study focused on learning about states’ motivation for establishing SEA programs, states’ experiences with implementing it, and outcomes of SEA participants and their businesses” (p.xv).

“This study has three components: (1) documenting the differences between state SEA program designs and implementation experiences, (2) describing characteristics and outcomes of SEA program participants, and (3) describing characteristics of businesses established by SEA program participants. Research questions across the three components cover program targeting, content and monitoring, as well as the characteristics and outcomes of SEA participants and their businesses, such as the amount of SEA allowances received by SEA participants and the tax revenues collected from their businesses” (p.xv).

“All three components of the study are fundamentally descriptive, and no causal inferences about the effectiveness of the SEA program should be drawn from the findings of this study even though [the authors] examine outcomes of SEA program participants and their businesses. The research design includes quantitative analysis of participant data from New York and Oregon, state-level aggregate data from DOL [U.S. Department of Labor], and qualitative analysis of information collected through site visits and review program materials from New Hampshire, New York, Oregon, Rhode Island, and Vermont. [The authors] purposively selected for inclusion in the study five states that varied in their length of time administering SEA programs. Differences in the outcomes of SEA program participants and other UI recipients cannot be attributed definitively to the program because they could be driven by unmeasured differences between the two groups, such as prior skills, experience, and motivation” (p.xv).

(Abstractor: Author)

“[Researchers] found that: (1) at the end of 2015, six states had an active SEA program; (2) from January 2013 through June 2015, close to 5,000 UI recipients entered SEA programs; and (3) in states with active programs between January 2013 and June 2015, the SEA program was about one percent or less of the size of the UI program” (p.xvi). “Findings include: • Program champions were instrumental in the establishment and maintenance of the program: they built support for the program among partners and within the state labor departments. • States adapted elements from other states’ SEA programs to meet their own unique needs, and they also adapted their programs over time…. • States typically added state-specific eligibility requirements to supplement federally mandated requirements. • SEA staff questioned the usefulness of the federally-mandated requirement that SEA participants be identified as likely to exhaust benefits because it may screen potential SEA participants who could be successful in the program” (p.xvi). • “All states require SEA participants to work full time on establishing their business and certify regularly that they are meeting program requirements. • Some states prescribe specific activities to SEA participants; others have more self-directed programs, in which participants more independently chart their own path to launching their business…. • Because of the relatively small number of individuals involved, tracking SEA program participation was often a time-consuming manual process. • States had different interpretations of DOL reporting requirements, including whether to report on their outcomes during program participation or afterwards as well; these interpretations influenced their approach to collecting outcome data” (p.xvii). • “On average, SEA program participants in New York and Oregon claimed about 23 weeks of benefits. In contrast, the comparison group of UI recipients in these states claimed 14 to 20 weeks of benefits, on average” (p.xviii). • “Fewer than one-third of New York SEA participants who responded to a state-administered survey reported that their business was operating at any point in the first four quarters after they enrolled in the program” (p.xix). (Abstractor: Author)

• Last Updated:
• Created:
• Resource Publication Date: 2017
• Author(s): Weigensberg, Elizabeth; Needels, Karen; Gould-Werth, Alix; Patnaik, Ankita; and Lee, Joanne.
• Organizational Author(s): Mathematica Policy Research
• Funding Source: U.S. Department of Labor
• Resource Availability: Publicly available
• Posted by: Wesley Peterson
• Posted in: Workforce System Strategies