WASHINGTON (AP) -- The Obama administration is looking for states to experiment with unemployment insurance by letting people test a job while receiving unemployment benefits.

It's a key part of the payroll tax cut package that President Barack Obama negotiated with Republicans in February.

The Labor Department will open the application process Thursday for 10 pilot projects across the country. Any state can apply.

The plan is modeled after a Georgia program called "Georgia Works." Under the plan, workers who have lost jobs can work in other temporary jobs for brief periods to keep their skills or gain new ones while receiving jobless benefits.

In a related story: The number of people seeking U.S. unemployment benefits dipped last week but remained higher than it's been in recent weeks. The slight rise in applications in the past few weeks could signal that the gains in the job market are uneven.

The Labor Department says weekly applications declined 2,000 to a seasonally adjusted 386,000. The previous week's data was revised up 8,000 to 388,000.

The four-week average, a less volatile measure, rose 5,500 to 374,750, the highest in nearly three months.

Hiring slowed in March after a fast start this year. Employers added only 120,000 jobs in March -- half the pace of the previous three months. Many economists downplayed the weak March figures, noting that a warmer winter may have led to some earlier hiring in January and February.