Recalls and unemployment insurance taxes
The US unemployment insurance (UI) system draws its funds from a payroll tax on employers. The tax rate varies directly with an employer's layoff history. There exists extensive evidence on the effect of this so-called experience rated tax on layoff decisions. However, since firms are typically liable for each dollar of regular UI benefits paid to laid off former employees, experience rating may also affect recall behaviour. This note therefore measures the effect of the UI financing system on the duration of unemployment. This article finds some evidence that higher layoff tax costs shorten the duration of recall unemployment.
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Volume (Year): 11 (2004)
Issue (Month): 10 ()
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References listed on IDEAS
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.:
- Topel, Robert H, 1983. "On Layoffs and Unemployment Insurance," American Economic Review, American Economic Association, vol. 73(4), pages 541-559, September.
- 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.
- David Card & Phillip B. Levine, 1992. "Unemployment Insurance Taxes and the Cyclical and Seasonal Properties of Unemployment," NBER Working Papers 4030, National Bureau of Economic Research, Inc.
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