Fraud in Unemployment Insurance System

The St. Louis Federal Reserve has released a study showing $3.3 billion was made in over payments for unemployment insurance.  It seems to me that this is just one type of fraud, not the type where people are lying about whether they are eligible and that all the information is properly reported.  Identity fraud might also be occurring.  With all the concern of the $44 billion in budget cuts from the sequester, this one type of fraud in one program equals almost one percent of those cuts.  You would think that this would get some attention.  From the St. Louis Fed:

The unemployment insurance program in the U.S. offers benefits to workers if they lose their jobs through no fault of their own. In 2011, this program cost $108 billion, of which nearly $3.3 billion was spent on overpayments due to fraud. 

Unemployment insurance fraud occurs when an ineligible individual collects benefits after intentionally misreporting his or her eligibility. Recent headlines have brought attention to extreme forms of fraud, such as the collection of unemployment benefits by prisoners. The dominant form of unemployment insurance fraud, however, is what's called concealed earnings fraud. This fraud occurs when individuals collect unemployment benefits while they are employed and are earning wages. The overpayments due to concealed earnings accounted for almost $2.2 billion in 2011, two-thirds of the total overpayments due to all categories of fraud. . . .

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The New York Times misses the real academic fraud: How academic research is biased towards finding statistically significant results that aren't really there

Suppose that you do an experiment and you don't get the "desired results." So you redo the experiment again and you get the "right" results.  Do you just report those results?  It seems that many commonly practice this.  The problem is that if you were to do an experiment many times, but only publish the one experiment that works, you have to adjust the statistical significance for the number of times that you redid the experiment.  Suppose that you did the experiment 10 times and that one time you got results that were significant at the 10 percent level.  Pretty obviously, you really didn't get statistically significant results.  The New York Times in its discussion of Stapel's fraudulent research doesn't seem to understand this problem.  Given that the others in psychology that were interviewed apparently view this as standard practice and assuming that is indeed the correct implication that they are giving, it means to me that the research in psychology is usually fraudulent.

Obviously there is a bias towards publishing research with statistically significant results in journals, and this bias creates the wrong incentives for academic authors.  But it raises the question what if anything one can learn from most academic research.  (BTW, it is one reason that I often try to publish redoing the different combination of control variables in my regressions.)  From the New York Times:

In one experiment conducted with undergraduates recruited from his class, Stapel asked subjects to rate their individual attractiveness after they were flashed an image of either an attractive female face or a very unattractive one. The hypothesis was that subjects exposed to the attractive image would — through an automatic comparison — rate themselves as less attractive than subjects exposed to the other image. 

The experiment — and others like it — didn’t give Stapel the desired results, he said. He had the choice of abandoning the work or redoing the experiment. . . .

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Massive 41% fraud in government free cell phone program

41% fraud?  And this from the FCC.  Might the real rate be even higher?  From the WSJ:

The U.S. government spent about $2.2 billion last year to provide phones to low-income Americans, but a Wall Street Journal review of the program shows that a large number of those who received the phones haven't proved they are eligible to receive them. 

The Lifeline program—begun in 1984 to ensure that poor people aren't cut off from jobs, families and emergency services—is funded by charges that appear on the monthly bills of every landline and wireless-phone customer. Payouts under the program have shot up from $819 million in 2008, as more wireless carriers have persuaded regulators to let them offer the service. 

Suspecting that many of the new subscribers were ineligible, the Federal Communications Commission tightened the rules last year and required carriers to verify that existing subscribers were eligible. The agency estimated 15% of users would be weeded out, but far more were dropped. 

A review of five top recipients of Lifeline support conducted by the FCC for the Journal showed that 41% of their more than six million subscribers either couldn't demonstrate their eligibility or didn't respond to requests for certification. . . . .

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