IDEAS home Printed from https://ideas.repec.org/a/eee/pubeco/v53y1994i1p1-29.html
   My bibliography  Save this article

Unemployment insurance taxes and the cyclical and seasonal properties of unemployment

Author

Listed:
  • Card, David
  • Levine, Phillip B.

Abstract

We combine Current Population Survey microdata for 1979-1987 with a newly assembled database of tax rates for the Unemployment Insurance system to measure the effects of imperfect experience-rating on temporary layoffs and other types of unemployment. We find a strong negative association between the degree of experience-rating and the rate of temporary layoff unemployment, with the largest effect in recessionary years and the smallest effect in expansionary years. Increases in the degree of experience-rating are also associated with dampened seasonal fluctuations in temporary layoffs, particularly in construction and durable manufacturing. The correlation between the degree of experience-rating and the unemployment rate of permanent job losers is smaller but also negative, whereas the correlation with the unemployment Me of job quitters and re-entrants is negligible. Attempts to control for the endogeneity of unemployment insurance taxes are consistent with a causal interpretation of our findings.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Card, David & Levine, Phillip B., 1994. "Unemployment insurance taxes and the cyclical and seasonal properties of unemployment," Journal of Public Economics, Elsevier, vol. 53(1), pages 1-29, January.
  • Handle: RePEc:eee:pubeco:v:53:y:1994:i:1:p:1-29
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/0047-2727(94)90011-6
    Download Restriction: Full text for ScienceDirect subscribers only
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Bertola, Giuseppe, 1990. "Job security, employment and wages," European Economic Review, Elsevier, vol. 34(4), pages 851-879, June.
    2. Burdett, Kenneth & Wright, Randall, 1989. "Unemployment Insurance and Short-Time Compensation: The Effects on Layoffs, Hours per Worker, and Wages," Journal of Political Economy, University of Chicago Press, vol. 97(6), pages 1479-1496, December.
    3. Angrist, J.D., 1991. "Linear Instrumental Variables Estimation Of Average Treatment Effects In Nonlinear Models," Harvard Institute of Economic Research Working Papers 1542, Harvard - Institute of Economic Research.
    4. Topel, Robert H, 1984. "Experience Rating of Unemployment Insurance and the Incidence of Unemployment," Journal of Law and Economics, University of Chicago Press, vol. 27(1), pages 61-90, April.
    5. Brown, Eleanor P, 1986. "Unemployment Insurance Taxes and Cyclical Layoff Incentives," Journal of Labor Economics, University of Chicago Press, vol. 4(1), pages 50-65, January.
    6. Patricia M. Anderson, 1992. "Linear Adjustment Costs and Seasonal Labour Demand: Unemployment Insurance Experience Rating in Retail Trade," Working Papers 673, Princeton University, Department of Economics, Industrial Relations Section..
    7. Feldstein, Martin S, 1978. "The Effect of Unemployment Insurance on Temporary Layoff Unemployment," American Economic Review, American Economic Association, vol. 68(5), pages 834-846, December.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Patricia M. Anderson & Bruce D. Meyer, 1994. "The Effects of Unemployment Insurance Taxes and Benefits on Layoffs Using Firm and Individual Data," NBER Working Papers 4960, National Bureau of Economic Research, Inc.
    2. Hansen, Gary D & Imrohoroglu, Ayse, 1992. "The Role of Unemployment Insurance in an Economy with Liquidity Constraints and Moral Hazard," Journal of Political Economy, University of Chicago Press, vol. 100(1), pages 118-142, February.
    3. Albanese, Andrea & Picchio, Matteo & Ghirelli, Corinna, 2020. "Timed to Say Goodbye: Does Unemployment Benefit Eligibility Affect Worker Layoffs?," Labour Economics, Elsevier, vol. 65(C).
    4. Edi Karni, 1999. "Optimal Unemployment Insurance: A Survey," Southern Economic Journal, John Wiley & Sons, vol. 66(2), pages 442-465, October.
    5. Lepage-Saucier, Nicolas, 2016. "The consumption response to temporary layoffs and hours losses," Labour Economics, Elsevier, vol. 41(C), pages 177-193.
    6. Sinko, Pekka, 2003. "Subsidizing vs. Experience Rating of Unemployment Insurance in Unionized Labor Markets," Discussion Papers 319, VATT Institute for Economic Research.
    7. Duchin, R. & Sosyura, D., 2012. "Safer Rations, Riskier Portfolios : Banks’ responses to Government Aid," Other publications TiSEM e67533e7-f388-4860-b65e-0, Tilburg University, School of Economics and Management.
    8. Julia Fath & Clemens Fuest, 2005. "Experience Rating versus Employment Protection Laws in a Model where Firms Monitor Workers," Scandinavian Journal of Economics, Wiley Blackwell, vol. 107(2), pages 299-314, June.
    9. Walter Nicholson & Karen Needels & Heinrich Hock, 2014. "Unemployment Compensation During the Great Recession: Theory and Evidence," National Tax Journal, National Tax Association;National Tax Journal, vol. 67(1), pages 187-218, March.
    10. Daniel Hallberg, 2011. "Economic Fluctuations and Retirement of Older Employees," LABOUR, CEIS, vol. 25(3), pages 287-307, September.
    11. Nathaniel Hilger, 2017. "All Together Now: Leveraging Firms to Increase Worker Productivity Growth," NBER Working Papers 23905, National Bureau of Economic Research, Inc.
    12. Noel Gaston, 1992. "A Characterization of Australian Unemployment Compensation: An Analysis of Labour Market Adjustment," The Economic Record, The Economic Society of Australia, vol. 68(3), pages 247-253, September.
    13. Hakola, Tuulia & Uusitalo, Roope, 2005. "Not so voluntary retirement decisions? Evidence from a pension reform," Journal of Public Economics, Elsevier, vol. 89(11-12), pages 2121-2136, December.
    14. Fath Julia & Fuest Clemens, 2005. "Temporary Layoffs and Unemployment Insurance: Is Experience Rating Desirable?," German Economic Review, De Gruyter, vol. 6(4), pages 471-483, December.
    15. Walter Nicholson & Karen Needels, 2006. "Unemployment Insurance: Strengthening the Relationship between Theory and Policy," Journal of Economic Perspectives, American Economic Association, vol. 20(3), pages 47-70, Summer.
    16. Hakola, Tuulia & Uusitalo, Roope, 2001. "Let's Make a Deal - the Impact of Social Security Provisions and Firm Liabilities on Early Retirement," Discussion Papers 260, VATT Institute for Economic Research.
    17. Duchin, Ran & Sosyura, Denis, 2014. "Safer ratios, riskier portfolios: Banks׳ response to government aid," Journal of Financial Economics, Elsevier, vol. 113(1), pages 1-28.
    18. Jeffrey A. Miron, 1996. "The Economics of Seasonal Cycles," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262133237, April.
    19. Michael Maloney & Rob McGregor, 1988. "Financing the unemployment insurance system and the interest group theory of government," Public Choice, Springer, vol. 56(3), pages 249-258, March.
    20. Peter Kuhn, "undated". "Canada and the "OECD Hypothesis": Does Labour Market Inflexibility Explain Canada's High Level of Unemployment?," Canadian International Labour Network Working Papers 10, McMaster University.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:pubeco:v:53:y:1994:i:1:p:1-29. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: http://www.elsevier.com/locate/inca/505578 .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/505578 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.