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Firms and Unemployment Insurance Take-Up

Author

Listed:
  • Marta Lachowska

    (W.E. Upjohn Institute for Employment Research)

  • Isaac Sorkin

    (Stanford University and NBER)

  • Stephen A. Woodbury

    (Michigan State University and W.E. Upjohn Institute for Employment Research)

Abstract

We use administrative data to quantify the firm role in unemployment insurance (UI) take-up. First, there are firm effects in both claiming and appeals, and, consistent with deterrence effects, these are negatively correlated. Second, low-wage workers are less likely to claim and more likely to have their claims appealed than median-wage workers, and firm effects explain a large share of these income gradients. Third, high-claiming and low-appealing firms are desirable firms: they are higher-paying and have lower separation rates. Finally, the dominant source of targeting error in the UI system is that eligible workers do not apply. Our findings emphasize a novel dimension of the role of firms in the labor market, and have implications for the financing of UI.

Suggested Citation

  • Marta Lachowska & Isaac Sorkin & Stephen A. Woodbury, 2022. "Firms and Unemployment Insurance Take-Up," Upjohn Working Papers 22-369, W.E. Upjohn Institute for Employment Research.
  • Handle: RePEc:upj:weupjo:22-369
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    Cited by:

    1. Anikó Bíró & Márta Bisztray & João G. da Fonseca & Tímea Laura Molnár, 2023. "Accident-induced absence from work and wage ladders," IFS Working Papers W23/30, Institute for Fiscal Studies.
    2. Serdar Birinci & Youngmin Park & Thomas Pugh & Kurt See, 2023. "Uncovering the Differences Among Displaced Workers: Evidence from Canadian Job Separation Records," Staff Working Papers 23-55, Bank of Canada.
    3. Acosta, Miguel & Mueller, Andreas I. & Nakamura, Emi & Steinsson, Jón, 2023. "Macroeconomic Effects of UI Extensions at Short and Long Durations," IZA Discussion Papers 16400, Institute of Labor Economics (IZA).
    4. Mark Duggan & Audrey Guo & Andrew C. Johnston, 2023. "Experience Rating as an Automatic Stabilizer," Tax Policy and the Economy, University of Chicago Press, vol. 37(1), pages 109-133.
    5. Christopher J. O'Leary & Salomon Orellana & Kevin Doyle & Randall W. Eberts & Ben Damerow & Amy Myers & Kenneth Kline & Anna Wilcoxson & Beth C. Truesdale & Scott Powell, 2023. "Predictive Analytics Supporting Labor Market Success: A Career Explorer for Job Seekers and Workforce Professionals in Michigan," Upjohn Working Papers 23-391, W.E. Upjohn Institute for Employment Research.

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    More about this item

    Keywords

    Unemployment insurance; take-up rates; UI claims; appeals; firm effects;
    All these keywords.

    JEL classification:

    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings
    • L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General

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