Sage Journals: Discover world-class research

Abstract

Economists have contributed important theoretical and empirical findings to the study of unemployment insurance (UI) benefits, but a deliberate study of the effect of UI taxation’s unique structure remains undone. We summarize available evidence on UI taxation, describe the history and institutions of experience rating, and outline important lines of inquiry for future work. As unemployment has risen, so has the need for a body of policy-relevant knowledge about the function and financing of UI systems.

Keywords

unemployment insurance labor demand experience rating

Get full access to this article

View all access options for this article.

References

Acemoglu

Shimer

. 1999. “Efficient Unemployment Insurance.” Journal of Political Economy 107 (5): 893–928.

Albrecht

J. W.

Vroman

S. B.

. 1999. “Unemployment Compensation Finance and Efficiency Wages.” Journal of Labor Economics 17 (1): 141–67.

Anderson

P. M.

1993. “Linear Adjustment Costs and Seasonal Labor Demand: Evidence from Retail Trade Firms.” Quarterly Journal of Economics 108 (4): 1015–42.

Anderson

P. M.

Meyer

B. D.

. 1993. “Unemployment Insurance in the United States: Layoff Incentives and Cross Subsidies.” Journal of Labor Economics 11 (1): 70–95.

Anderson

P. M.

Meyer

B. D.

. 1997. “The Effects of Firm Specific Taxes and Government Mandates with an Application to the U.S. Unemployment Insurance Program.” Journal of Public Economics 65 (2): 119–45.

Anderson

P. M.

Meyer

B. D.

. 2000. “The Effects of the Unemployment Insurance Payroll Tax on Wages, Employment, Claims and Denials.” Journal of Public Economics 78 (1): 81–106.

Anderson

P. M.

Meyer

B. D.

. 2006. “Unemployment Insurance Tax Burdens and Benefits: Funding Family Leave and Reforming the Payroll Tax.” National Tax Journal 59 (1): 77–95.

Arnold

A. R.

1945. “Experience Rating.” Yale Law Journal 55:218.

Auray

Fuller

D. L.

. 2020. “Eligibility, Experience Rating and Unemployment Insurance Take-up.” Quantitative Economics 11 (3): 1059–107.

10.

Baicker

Goldin

Katz

L. F.

. 1998. A Distinctive System: Origins and Impact of US Unemployment Compensation. Chicago, IL: University of Chicago Press.

11.

Baily

M. N.

1978. “Some Aspects of Optimal Unemployment Insurance.” Journal of Public Economics 10 (3): 379–402.

12.

Becker

J. M.

1981. “Unemployment Insurance Financing: An Evaluation.” Working Paper. American Enterprise Institute, Washington, DC.

13.

Behaghel

Crépon

Sédillot

. 2008. “The Perverse Effects of Partial Employment Protection Reform: The Case of French Older Workers.” Journal of Public Economics 92 (3): 696–721.

14.

Bentolila

Bertola

. 1990. “Firing Costs and Labour Demand: How Bad Is Eurosclerosis?” The Review of Economic Studies 57 (3): 381–402.

15.

Betcherman

Leckie

. 1995. “Employer Responses to UI Experience Rating: Evidence from Canadian and American Establishments.” Working Paper. https://www.semanticscholar.org/paper/UI-Employer-Responses-to-UI-Experience-Rating-%3A-and-Betcherman-Leckie/34c53ec1cde84d031e308291eea48e03f26f614f

16.

Bigge

1938. “Immediate Problems of Unemployment Compensation.” Social Security Bulletin 1 (3): 5–6.

17.

Blanchard

Olivier J.

Tirole

Jean

. 2008. “The Joint Design of Unemployment Insurance and Employment Protection: A First Pass.” Journal of the European Economic Association 6 (1): 45–77.

18.

Blaustein

1993. “Unemployment Insurance in the United States: The First Half Century.” W.E. Upjohn Institute 1–389 . Kalamazoo, MI: W. E. Upjohn Institute.

19.

Card

Levine

P. B.

. 1994. “Unemployment Insurance Taxes and the Cyclical and Seasonal Properties of Unemployment.” Journal of Public Economics 53 (1): 1–29.

20.

CBO. 2012. “Unemployment Insurance in the Wake of the Recent Recession.” CBO Files 1–30. https://www.cbo.gov/publication/43734

21.

Chetty

2006. “A General Formula for the Optimal Level of Social Insurance.” Journal of Public Economics 90:1879–901.

22.

Chetty

Hendren

Kline

Saez

. 2014. “Where Is the Land of Opportunity? The Geography of Intergenerational Mobility in the United States.” The Quarterly Journal of Economics 129 (4): 1553–623.

23.

Deere

D. R.

1991. “Unemployment Insurance and Employment.” Journal of Labor Economics 9 (4): 307–24.

24.

Di Maggio

Kermani

. 2016. “The Importance of Unemployment Insurance as an Automatic Stabilizer.” NBER Working Paper No. 22625 . NBER, Cambridge, MA.

25.

Dingel

2017. “The Determinants of Quality Specialization.” The Review of Economic Studies 84 (4): 1551–82.

26.

Doornik

B. V.

Fazio

Schoenherr

Skrastins

. 2020. “Unemployment Insurance as a Subsidy to Risky Firms.” Working Paper. Central Bank of Brazil, Research Department, Portuguese. https://papers.ssrn.com/sol3/Papers.cfm?abstract_id=3168769

27.

Doornik

B. V.

Schoenherr

Skrastins

. 2020. “Strategic Formal Layoffs: Unemployment Insurance and Informal Labor Markets.” Working Paper.

28.

Easterly

1999. “The Middle Class Consensus and Economic Development.” Policy Research Working Papers . The World Bank, Washington, DC.

29.

Fath

Fuest

. 2005. “Experience Rating of Unemployment Insurance in the U.S.: A Model for Europe?” CESifo DICE Report 3 (2): 45–50.

30.

Feldman

Smith

D. M.

. 1939. The Case for Experience Rating. Princeton, NJ: Princeton University Press.

31.

Feldstein

1976. “Temporary Layoffs in the Theory of Unemployment.” Journal of Political Economy 84 (5): 937–57.

32.

Feldstein

1978. “The Effect of Unemployment Insurance on Temporary Layoff Unemployment.” American Economic Review 68 (5): 834–46.

33.

Feldstein

Altman

. 2007. “Unemployment Insurance Savings Accounts.” Tax Policy and the Economy 21:35–63.

34.

Fort

Teresa C.

Klimek

Shawn D.

. 2016. “The Effects of Industry Classification Changes on US Employment Composition.” Tuck School at Dartmouth.

35.

Gruber

1997. “The Incidence of Payroll Taxation: Evidence from Chile.” Journal of Labor Economics 15 (S3): S72–101.

36.

Guo

. 2020. “The Effects of Unemployment Insurance Taxation on Multi-establishment Firms.” Working Paper. Review of Economics and Statistics.

37.

Hagedorn

Karahan

Manovskii

Mitman

. 2016. “Unemployment Benefits and Unemployment in the Great Recession: The Role of Macro Effects.” NBER Working Paper No. 19499 . NBER, Cambridge, MA.

38.

Hakola

Uusitalo

. 2005. “Not So Voluntary Retirement Decisions? Evidence from a Pension Reform.” Journal of Public Economics 89 (11): 2121–36.

39.

Hartley

van Ours

Vodopivec

. 2011. “Incentive Effects of Unemployment Insurance Savings Accounts: Evidence from Chile.” Labour Economics 18 (6): 798–809.

40.

Hawkins

Simola

. 2020. “Paying for Disability Insurance?: Firm Cost Sharing and Its Employment Consequences.” Working Paper. http://conference.iza.org/conference_files/UWV_2020/hawkins_a29153.pdf

41.

Hopenhayn

H. A.

Nicolini

J. P.

. 1997. “Optimal Unemployment Insurance.” Journal of Political Economy 105 (2): 412–38.

42.

Hopenhayn

H. A.

Rogerson

. 1993. “Job Turnover and Policy Evaluation: A General Equilibrium Analysis.” Journal of Political Economy 101 (5): 915–38.

43.

Huang

P.-C

. 2020. “Employment Effects of the Unemployment Insurance Tax Base.” Working Paper. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3660427

44.

Israelsen

D. L.

1994. “The Economic Thought of Marriner S. Eccles.” Economics Research Institute Study Paper 94 (11): 1–37.

45.

Johnston

A. C.

2020. “Unemployment Insurance Taxes and Labor Demand: Quasi-experimental Evidence from Administrative Data.” American Economic Journal: Economic Policy. https://www.aeaweb.org/articles?id=10.1257/pol.20190031

46.

Johnston

A. C.

Mas

. 2018. “Potential Unemployment Insurance Duration and Labor Supply: The Individual and Market-level Response to a Benefit Cut.” Journal of Political Economy 126 (6): 2480–522.

47.

Lester

R. A.

1960. “Financing of Unemployment Insurance.” ILR Review 14 (1): 52–67.

48.

Lester

R. A.

Kidd

C. V.

. 1939. The Case against Experience Rating in Unemployment Compensation. Princeton, NJ: Princeton University Press.

49.

Ljungqvist

Sargent

T. J.

. 1998. “The European Unemployment Dilemma.” Journal of Political Economy 106 (3): 514–50.

50.

Ljungqvist

Sargent

T. J.

. 2008. “Two Questions about European Unemployment.” Econometrica 76 (1): 1–29.

51.

Lusher

Schnorr

G. C.

Taylor

R. L.

. 2020. “Unemployment Insurance as a Worker Indiscipline Device? Evidence from Scanner Data.” Working Paper. American Economic Journal: Applied Economics.

52.

Meriam

R. S.

1933. “Some Theoretical Aspects of Unemployment Reserves.” American Economic Review 23 (1): 23–30.

53.

Millard

S. P.

Mortensen

D. T.

. 1997. “The Unemployment and Welfare Effects of Labour Market Policy: A Comparison of the USA and the UK.” In Unemployment Policy: Government Options for the Labor Market, edited by Snower

D. J.

Mortensen

D. T.

, 545–71. Cambridge, UK: Cambridge University Press.

54.

Miller

Pavosevich

. 2019. “Alternative Methods of Experience RatingUnemployment Insurance Employer Taxes.” Public Budgeting & Finance 39 (1).

55.

Myers

C. A.

1939. “Employment Stabilization and the Wisconsin Act.” American Economic Review 29 (4): 708–23.

56.

Ratner

2013. “Unemployment Insurance Experience Rating and Labor Market Dynamics.” Federal Reserve Working Paper 1–69. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2376364

57.

Raushenbush

1933. “The Wisconsin Idea: Unemployment Reserves.” Annals of the American Academy of Political and Social Science 170 (1): 78.

58.

Saffer

1982. “Layoffs and Unemployment Insurance.” Journal of Public Economics 19 (1): 121–29.

59.

Schlesinger

A. M.

1958. The Coming of the New Deal: The Age of Roosevelt. New York: Houghton Mifflin.

60.

Simonetta

2017. “What the EU Can Learn from the American Experience with Unemployment Insurance.” Intereconomics 52 (3): 142–48.

61.

Topel

1983. “On Layoffs and Unemployment Insurance.” American Economic Review 73 (4): 541–59.

62.

Wang

Williamson

S. D.

. 2002. “Moral Hazard, Optimal Unemployment Insurance, and Experience Rating.” Journal of Monetary Economics 49 (7): 1337–71.

63.

Witte

E. E.

1945. “The Development of Unemployment Compensation.” Yale Law Journal 55 (1): 1337–71.

The Finance of Unemployment Compensation and Its Consequences

Abstract

Keywords

Get full access to this article

References