Unemployment Insurance Tax Burdens and Benefits: Funding Family Leave and Reforming the Payroll Tax
AbstractWe examine the distributional consequences of the UI payroll tax using representative individual microdata. We calculate taxes paid by individual wage and individual and household income deciles, incorporating the effects of multiple job holding and turnover. This tax distribution is compared with the distribution of UI benefits and benefits net of taxes, as well as to the burdens imposed by the federal income tax. We conclude that the UI payroll tax is indeed quite regressive. Within the context of the regular UI program, this regressivity is offset by the progressive nature of benefits, leaving the net benefit distribution progressive. We simulate a revenue-neutral increase to the OASDI level of the taxable wage base. The share of total UI taxes paid becomes fairly equal, and net benefits become positive across more deciles. Finally, we examine the effect of providing family leave within the UI system as recently proposed. We find that the share of such benefits going to relatively high-income groups is likely to be much larger than is the case for regular UI benefits.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 10043.
Date of creation: Oct 2003
Date of revision:
Publication status: published as Anderson, Patricia M. and Bruce D. Meyer. "Unemployment Insurance Tax Burdens And Benefits: Funding Family Leave And Reforming The Payroll Tax," National Tax Journal, 2006, v59(1,Mar), 77-95.
Note: LS PE
Contact details of provider:
Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.
Web page: http://www.nber.org
More information through EDIRC
Other versions of this item:
- Anderson, Patricia M. & Meyer, Bruce D., 2006. "Unemployment Insurance Tax Burdens and Benefits: Funding Family Leave and Reforming the Payroll Tax," National Tax Journal, National Tax Association, vol. 59(1), pages 77-95, March.
- Patricia M. Anderson & Bruce D. Meyer, 2005. "Unemployment Insurance Tax Burdens and Benefits: Funding Family Leave and Reforming the Payroll Tax," Working Papers 0601, Harris School of Public Policy Studies, University of Chicago.
- H2 - Public Economics - - Taxation, Subsidies, and Revenue
- J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers
This paper has been announced in the following NEP Reports:
- NEP-ALL-2003-11-30 (All new papers)
- NEP-IAS-2003-11-30 (Insurance Economics)
- NEP-LAB-2003-11-30 (Labour Economics)
- NEP-PBE-2003-11-30 (Public Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Anderson, Patricia M & Meyer, Bruce D, 1997. "Unemployment Insurance Takeup Rates and the After-Tax Value of Benefits," The Quarterly Journal of Economics, MIT Press, vol. 112(3), pages 913-37, August.
- Robert Hutchens, 1981. "Distributional equity in the unemployment insurance system," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 34(3), pages 377-385, April.
- Bound, John & Brown, Charles & Mathiowetz, Nancy, 2001. "Measurement error in survey data," Handbook of Econometrics, in: J.J. Heckman & E.E. Leamer (ed.), Handbook of Econometrics, edition 1, volume 5, chapter 59, pages 3705-3843 Elsevier.
- Bruce D. Meyer & Wallace K. C. Mok & James X. Sullivan, 2009.
"The Under-Reporting of Transfers in Household Surveys: Its Nature and Consequences,"
NBER Working Papers
15181, National Bureau of Economic Research, Inc.
- Bruce D. Meyer & Wallace K. C. Mok & James X. Sullivan, 2009. "The Under-Reporting of Transfers in Household Surveys: Its Nature and Consequences," Working Papers 0903, Harris School of Public Policy Studies, University of Chicago.
- Amuedo-Dorantes, Catalina & Kimmel, Jean, 2005. "Moonlighting Behavior over the Business Cycle," IZA Discussion Papers 1671, Institute for the Study of Labor (IZA).
- Catalina Amuedo-Dorantes & Jean Kimmel, 2009.
"Moonlighting Over The Business Cycle,"
Western Economic Association International, vol. 47(4), pages 754-765, October.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If references are entirely missing, you can add them using this form.