Employment and Training Administration
Washington, D. C. 20210






October 15, 1999




October 31, 2000











Unemployment Insurance Service




Comprehensive Assessment of Self-Employment Assistance (SEA) Programs

  1. Purpose. To advise the States of a comprehensive assessment of SEA programs by the Unemployment Insurance Service (UIS).

  2. References. "Self Employment Programs for Unemployed Workers", Unemployment Insurance UI Occasional Paper 92-2; "Self-Employment as Reemployment Option: Demonstration Results and National Legislation" , UI Occasional Paper 94-3; " Self-Employment Programs: A New Reemployment Strategy, Final Report on the UI Self-Employment Demonstration", UI Occasional Paper, 95-4; " Report to Congress: Self-Employment Assistance (SEA) Program", Urban Institute, 1997; and Unemployment Insurance Program Letters (UIPLs) Nos. 14-94, 11-98, and 11-99.

  3. Background. With technological and economic changes affecting the U.S. economy and the job market, UIS has pursued a number of novel approaches to assist UI recipients in bridging the gap between former employment and future success. One of the strategies conceived in the late 1980s was to permit UI claimants who were profiled as likely benefit exhaustees to undergo training and orientation to allow them to attempt to start their own businesses as self-employed individuals.

    SEA demonstration projects were sponsored by UIS in Washington, beginning in 1989, and in Massachusetts, beginning in 1990. Based on the success of both programs, the 1993 North American Free Trade Agreement ( NAFTA) legislation authorized States to provide SEA as an option to UI claimants, and established SEA program requirements. As part of SEA requirements, States that implemented the program must guarantee that no more than 5% of a State's UI population could participate in the SEA program, that UI funds would not be used to pay for training costs, and that the conduct of SEA programs would not incur additional cost to the UI fund.

    A number of studies of SEA programs have been conducted since the UIS sponsored the first pilot projects in the late 1980s. The most recent assessment in the 1997 Report To Congress recommended that a follow-up study be conducted to more adequately assess the longer term impacts of SEA for program participants. As a result, this study was developed.

  4. Comprehensive Assessment of SEA Programs. The Employment and Training Administration (ETA) has contracted with DTI Associates of Arlington, Virginia, to conduct this evaluation. DTI Associates and its sub-contractor, Madonna-Yost Opinion Research of Lancaster, Pennsylvania, will conduct a comprehensive assessment of SEA programs over the next 18 months. The DTI project leader is Ms. Wendy Ellison Armon. Dr. William Kosanovich, is the Senior Research Analyst. States that have an SEA program history should expect to be contacted by one of these individuals or a member of their team.

    The present study intends to assess the longer term impacts of the SEA program. It is intended to be a comprehensive study, including a benefit cost analysis of SEA, as well as a comparative analysis among the States that have enacted and administered SEA programs. The study will be used to measure the relative benefit-to-cost ratio, to disseminate information, to refine service delivery for States that have operational SEA programs, and to assist States that may establish SEA programs in the future. The study findings will be published as a UI Occasional Paper so that all States may benefit from this research.

    In States that have operational SEA programs, it is anticipated that an individual or small group from the research team will want to meet with staff from States that have operated SEA programs and learn about the operation of their program. They will most likely contact you by the end of October as they work to prepare a survey that will be administered to a sampling of former SEA participants. They will be interested in all aspects of program administration, the mix of services that are provided for SEA participants, completion statistics, costs associated with the program, and contact information for program completers over the past five years. They anticipate 1 or 2 day visits to State offices to talk with program administrators and to interview a small number of program participants.

  5. Action. State Administrators are requested to 1.) encourage staff to participate and cooperate in this research effort if their State operates or has operated an SEA program; 2.) submit any overdue annual reports on their SEA program; and 3.) alert their Regional administrator if they have operated a program similar to an SEA program which assists UI claimants to become self-employed which would be of interest to this project.

  6. Inquiries. Questions should be directed to appropriate Regional Office staff.