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New ways of evaluating state unemployment insurance

Author

Listed:
  • Wei-Jang Huang
  • Christopher J. O'Leary
  • Robert Tannenwald

Abstract

Comparisons among state unemployment insurance systems can be misleading. Frequently quoted indicators of the generosity of their benefits, competitiveness, and adherence to the experience-rating principal are influenced by states' relative economic conditions, thereby obscuring underlying structural differences. Moreover, because the indicators are statewide averages, they obscure important intrastate differences in tax and benefit treatment across types of firms and workers. This article offers alternative indicators based on a simulation approach designed to alleviate these problems. The authors use the simulated experiences of representative workers and firms to compare 28 states and contrast the results with those obtained from more conventional indicators. Given the intricacy of the issues and the harsh trade-offs involved, it is not surprising that debates concerning state UI policy are so contentious. The authors point out that policymakers reviewing the simulations can gain insight into the nature of the trade-offs among policy goals entailed in various UI options. This may even help them to identify \"win-win\" situations, in which a policy innovation that furthers one goal simultaneously furthers another.

Suggested Citation

  • Wei-Jang Huang & Christopher J. O'Leary & Robert Tannenwald, 1999. "New ways of evaluating state unemployment insurance," New England Economic Review, Federal Reserve Bank of Boston, issue Mar, pages 15-40.
  • Handle: RePEc:fip:fedbne:y:1999:i:mar:p:15-40
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    References listed on IDEAS

    as
    1. 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.
    2. Christopher L. Foote, 1998. "Trend Employment Growth and the Bunching of Job Creation and Destruction," The Quarterly Journal of Economics, Oxford University Press, vol. 113(3), pages 809-834.
    3. Christopher J. O'Leary & Murray Rubin, 1997. "Adequacy of the Weekly Benefit Amount," Book chapters authored by Upjohn Institute researchers, in: Christopher J. O'Leary & Stephen A. Wandner (ed.), Unemployment Insurance in the United States: Analysis of Policy Issues, chapter 5, pages 163-210, W.E. Upjohn Institute for Employment Research.
    4. Patricia M. Anderson & Bruce D. Meyer, 1994. "The Extent and Consequences of Job Turnover," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 25(1994 Micr), pages 177-248.
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    Cited by:

    1. Christopher J. O'Leary & Stephen A. Wandner, 2001. "Unemployment Compensation and Older Workers," Book chapters authored by Upjohn Institute researchers, in: Peter P. Budetti & Richard V. Burkhauser & Janice M. Gregory & H. Allan Hunt (ed.), Ensuring Health and Income Security for an Aging Workforce, pages 85-133, W.E. Upjohn Institute for Employment Research.
    2. Peter Hans Matthews & Ivan Kandilov & Bradford Maxwell, 2002. "Interstate differences in insured unemployment: some recent evidence," Applied Economics Letters, Taylor & Francis Journals, vol. 9(14), pages 945-948.
    3. Christopher J. O'Leary & Robert Tannenwald & Wei-Jang Huang & Pei Zhu, 2000. "Alternative Measures of State UI Systems," Upjohn Working Papers and Journal Articles 00-62, W.E. Upjohn Institute for Employment Research.
    4. Julia Fath & Clemens Fuest, 2005. "Experience Rating of Unemployment Insurance in the US: A Model for Europe?," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 3(2), pages 45-50, 07.

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    More about this item

    Keywords

    Unemployment insurance; New England; Connecticut; Massachusetts; Taxation;
    All these keywords.

    JEL classification:

    • J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings

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