In 1996, a total of 18,962 individuals applied for Unemployment Insurance (see Table 1). About two-thirds (or 12,735) of them were one-time UI claimants, who never appeared in the 1997 or 1998 UI program. The other one-third (or 6,227) were frequent UI claimants, who appeared in the UI files again in 1997 or 1998 or both years. Part One of this research will focus on the one-time UI claimants and Part Two, in the next issue of Wyoming Labor Force Trends, will concentrate on the frequent UI claimants.

One-Time UI Claimants

Among the 12,735 one-time UI claimants in 1996, some found a re-employment opportunity in Wyoming and others may have left the state. By matching claimants’ data with the quarterly wage records data, it was found that more than two-thirds (8,780 or 68.9%) returned to work by the end of 1998. Most of them (8,211 or 93.5%) were actually re-employed within one year (by the end of 1997) after their job-loss year. On the other hand, nearly one-third (3,955 or 31.0%) of the one-time UI claimants never returned to Wyoming UI-covered jobs.³ Several reasons exist as to why the claimants are no longer in UI-covered jobs. They may have left the state, become self-employed or were still searching for jobs.

Table 2 provides details on when and how many individuals returned to work by major industry. Individuals who came from the Mining or Construction industry had the best chances of re-employment, with one-year re-employment rates of 76.8 and 75.1 percent, respectively. On the other hand, those who worked for federal agencies or out-of-state employers (Nonclassified industry in this research)⁴ had the lowest one-year re-employment rate in Wyoming, only 24.6 percent. In fact, most (71.4%) of them never went back to work even two years after their job loss. They may have left the state.

The majority (8,211 or 93.5%) of the re-employed one-time UI claimants returned to work within one year after their job losses. The following analysis will focus on this segment of claimants. Does gender or age affect the claimants’ probability of re-employment? Figure 2 shows that there is almost no difference between male and female claimants in one-year re-employment rates (64.6% and 63.6%, respectively).

However, age seems to significantly affect the probability of claimants’ re-employment. Younger claimants have a higher probability of obtaining re-employment, regardless of gender. More than three-quarters (77.3% male and 74.2% female) of the claimants who were under 25 years old returned to work in one year after their job losses, and over half (53.3% male and 54.7% female) of those who were 45-54 years old had returned to work during the same time period.

Is there any difference between industries in absorbing their unemployed workers? Table 3 shows that as a total, just over half (51.2%) of the claimants were re-employed in the same industry and nearly half (48.8%) went to a different industry. However, this distribution was quite different between industries. Individuals who worked in the Construction and Mining industries before job loss had the highest return rate (63.4% and 62.0%, respectively). Again, those who worked for federal agencies and out-of-state employers (Nonclassified industry) had the lowest return rate (3.7%). Public Administration and Finance, Insurance & Real Estate (FIRE) had the second lowest return rates, 23.4 percent and 23.5 percent, respectively. These return rates may be a function of industry growth. According to the Wyoming 1997 Annual Covered Employment and Wages publication, Mining and Construction were the fastest growing industries in 1997, with 6.0 percent and 5.7 percent increases, respectively, in their employment. Public Administration declined 0.1 percent.

Examining the total number of claimants on the wage change⁵ issue in Table 4, over half (50.3%) of them found better paying jobs and nearly half (49.7%) found similar or less well paying jobs. Again, wage change varied across different industries. About half of the claimants from Agriculture (51.0%) and Mining (49.8%) industries have found jobs that pay more than 10.0 percent higher wages than their previous jobs. Only 26.6 percent of the claimants from the Public Administration industry had the same kind of experience. Most claimants from this industry actually found re-employment with a lower wage, 60.4 percent of them earning a wage more than 10.0 percent less than their previous job's wages.

What affects the claimants’ re-employment wage levels? Table 4 shows that younger people have a greater chance of finding better paying jobs. More than half (53.3%) of the individuals who were less than 25 years old were re-employed at a wage more than 10.0 percent higher than their previous wages. On the other hand, 52.0 percent of the claimants between 45 and 54 years old earned more than 10.0 percent less than their previous earnings.

In addition to age, the previous wage level also had a strong relation to the re-employment wage level (see Table 5). More claimants with a lower previous wage found better paying jobs than the claimants who had a higher previous wage. More than 55.0 percent of the individuals who made $3,000 or less per quarter before job losses found re-employment with more than 10.0 percent higher wage than their previous earnings. However, only 11.2 percent of claimants in the highest wage bracket ($11,000 or more per quarter) found that kind of higher re-employment wage. In fact, 70.1 percent of them experienced more than a 10.0 percent drop in their earnings.

Age is a very important factor on claimants’ re-employment rates and wage levels. Younger people had a higher probability of re-employment and finding a better paying job than older people. One of the main reasons for this could be that most young people had a low wage job due to the lack of experience and tenure. Table 6 shows that 67.0 percent of the claimants who were 25 or younger earned a quarterly wage of less than $3,000 on their previous jobs. Only 33.2 percent of claimants who were at age 45 to 54 were at that lower wage level. The fact is that to find another better, but still comparatively lower paying job (for the younger workers) is much easier than to find another better higher paying job (for the older workers). However, in order to support this potential explanation, additional information is needed in future study such as claimants’ tenure and education.

Conclusion

In summary, an average of 15,894 individuals experienced job losses and applied for UI in Wyoming in each of the past seven years, 1993 to 1999. About two-thirds were one-time UI claimants (based on the 1996 data), and one-third were frequent UI claimants. More than two-thirds (68.9%) of the one-time UI claimants obtained re-employment in the state within two years after their job losses. The other 31.0 percent never returned to Wyoming UI-covered employment. Perhaps they have left the state, become self employed or are still searching for jobs. Younger UI claimants had a better chance of re-employment within one year after their job losses than the older claimants. The claimants’ ages and pre-job loss wage levels showed a negative relation to their re-employment wage level: the younger the individual, the higher the possibility of obtaining higher paying re-employment; the lower the pre-job loss wage level, the better the chance of finding a better paying job.

1 Initial claim: the first application that a newly unemployed worker has to file in order to receive UI benefits ("The Uses of Unemployment Insurance Claims Information" in the February 1996 issue of Wyoming Labor Force Trends). Filing an initial claim does not guarantee eligibility for UI benefits.

2 Wayne M. Gosar, "Wyoming Unemployment Insurance Wage Record Summary Statistics: A New Way to Look at Wyoming," Wyoming Labor Force Trends, May 1995.

3 UI-covered jobs are jobs reported by employers subject to the state and federal Unemployment Insurance Law. About 91.0 percent of the employees in Wyoming were covered by UI according to the 1998’s Wage Records and the Local Area Unemployment Statistics.

4 Nonclassified industry in this research includes most of the reimbursable employers, such as out-of-state employers and federal agencies. These reimbursable employers do not pay UI tax or report the related employment and wage information to the Employment Resources Division since they reimburse the exact amount of UI benefits paid to their unemployed workers. As a result, this division does not keep these reimbursable employers’ information (industry classification code, county code, etc.).

5 Wage change: comparison of the average quarterly wage between the claimants’ re-employment and pre-job loss employment. The 1997 average quarterly wage is defined as re-employment wage and the 1995 average quarterly wage is defined as pre-job loss wage. A claimant’s average quarterly wage in this research is the annual total wage divided by the number of quarters worked.