Unemployment Insurance Experience Rating of Firms and Layoffs
The US unemployment insurance system is experience rated. Firms using the system more often have to pay higher UI taxes in order to cover the additional burden imposed on the system. Experience rating introduces a tax on layoffs which is supposed to counterbalance the implicit layoff subsidy resulting from the UI system. In turn, this is expected to reduce excess layoffs. In reality, however, experience rating implies higher payroll taxes on the remaining workforce of firms experiencing layoffs. In a theoretical model, we show that because of the backward looking nature of experience rating and its incompleteness particularly for firms which have reached their top tax ratings, a world with imperfect experience rating can actually lead to more layoffs than would have occured had there been no experience rating at all.
To our knowledge, this item is not available for
download. To find whether it is available, there are three
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
|Date of creation:||1996|
|Contact details of provider:|| Postal: UNIVERSITE LAVAL, GREPE DEPARTEMENT D'ECONOMIQUE, QUEBEC G1K 7P4.|
Phone: (418) 656-5122
Fax: (418) 656-2707
Web page: http://www.ecn.ulaval.ca/
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:fth:lavape:9615. 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: (Thomas Krichel)
If references are entirely missing, you can add them using this form.