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Unemployment Insurance in the United States: Layoff Incentives and Cross Subsidies

Patricia Anderson and Bruce Meyer

Journal of Labor Economics, 1993, vol. 11, issue 1, S70-95

Abstract: The authors survey unemployment insurance in the United States and provide new evidence on the unemployment insurance payroll tax. Most unemployment insurance receipt is due to firms that pay part of the unemployment insurance costs of their layoffs, but weak experience rating leads most firms to pay considerably less than the full costs. Industries consistently receiving subsidies from the unemployment insurance system are construction, manufacturing, and mining. Finally, a large fraction of layoffs resulting in payment of unemployment insurance are made by firms that are not charged for the costs of the claim because they have employed the individual for less than two quarters. Copyright 1993 by University of Chicago Press.

Date: 1993
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