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Recalls and unemployment insurance taxes

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  • S. Jurajda

Abstract

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.

Suggested Citation

  • S. Jurajda, 2004. "Recalls and unemployment insurance taxes," Applied Economics Letters, Taylor & Francis Journals, vol. 11(10), pages 651-656.
  • Handle: RePEc:taf:apeclt:v:11:y:2004:i:10:p:651-656
    DOI: 10.1080/1350485042000238861
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    References listed on IDEAS

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    1. Topel, Robert H, 1983. "On Layoffs and Unemployment Insurance," American Economic Review, American Economic Association, vol. 73(4), pages 541-559, September.
    2. 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.
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    Cited by:

    1. Alfonso Alba & Jose Maria Arranz & Fernando Muñoz-Bullón, 2012. "Re-employment probabilities of unemployment benefit recipients," Applied Economics, Taylor & Francis Journals, vol. 44(28), pages 3645-3664, October.
    2. Vikström, Johan, 2009. "The effect of employer incentives in social insurance on individual wages," Working Paper Series 2009:13, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    3. Melanie Arntz & Ralf Wilke, "undated". "Can public employment subsidies render the German construction sector weather proof?," Discussion Papers 09/06, University of Nottingham, School of Economics.

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