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New Ways of Evaluating State Unemployment Insurance

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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.
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Suggested Citation

  • Robert Tannenwald & Christopher J. O'Leary & Wei-Jang Huang, "undated". "New Ways of Evaluating State Unemployment Insurance," Upjohn Working Papers rtcjo1999, W.E. Upjohn Institute for Employment Research.
    • Handle: RePEc:upj:weupjo:rtcjo1999
    Note: Appears in New England Economic Review (March/April 1999): 15-40
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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 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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    Keywords

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    JEL classification:

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

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