Unemployment Insurance Experience Rating and Labor Market Dynamics
Unemployment insurance experience rating imposes higher payroll tax rates on firms that have laid off more workers in the past. To analyze the effects of UI tax policy on labor market dynamics, this paper develops a search model of unemployment with heterogeneous firms and realistic UI financing. The model predicts that higher experience rating reduces both job creation and job destruction. Using firm-level data from the Quarterly Census of Employment and Wages, the model is tested by comparing job creation and job destruction across states and industries with different UI tax schedules. The ...
Income in the Off-Season: Household Adaptation to Yearly Work Interruptions
Joblessness is highly seasonal. To analyze how households adapt to seasonal joblessness, we introduce a measure of seasonal work interruptions premised on the idea that a seasonal worker will tend to exit employment around the same time each year. We show that an excess share of prime-age US workers experience recurrent separations spaced exactly 12 months apart. These separations coincide with aggregate seasonal downturns and are concentrated in seasonally volatile industries. Examining workers most prone to seasonal work interruptions, we find that these workers incur large earnings losses ...
If you lost your job …
Intuition and conventional economic models suggest that unemployment benefits should decline over time to induce unemployed workers to seek jobs.
Unemployment insurance: payments, overpayments and unclaimed benefits
In the U.S. unemployment insurance program, most of the overpayments due to fraud arise from individuals collecting benefits while they are gainfully employed. In addition, the overpayments are dwarfed by payments unclaimed by some who are eligible for unemployment benefits.
Reconciling Unemployment Claims with Job Losses in the First Months of the COVID-19 Crisis
In the spring of 2020, many observers relied heavily on weekly initial claims for unemployment insurance benefits (UI) to estimate contemporaneous reductions in US employment induced by the COVID-19 pandemic. Though UI claims provided a timely, high-frequency window into mounting layoffs, the cumulative volume of initial claims filed through the May reference week substantially exceeded realized reductions in payroll employment and likely contributed to the historically large discrepancy between consensus expectations of further April-to-May job losses and the strong job gains reflected in ...
The American Recovery and Reinvestment Act of 2009: a review of stimulus spending in New York and New Jersey
The ARRA stimulus package was designed to spur economic and employment growth in response to a deepening U.S. recession and the weakened fiscal conditions of many state governments. An analysis of the local allocation of ARRA funds shows that the $35 billion of stimulus spending in New York was relatively concentrated in expanded funding for Medicaid, while a large share of the $12 billion allocated to New Jersey went to extending unemployment insurance benefits. While ARRA funding supplemented tax revenues in both states in fiscal years 2010 and 2011, the program's spending components are ...
These Caps Spilleth Over: Equilibrium Effects of Unemployment Insurance
The design of US unemployment insurance (UI) policy--which features benefits assigned as a percentage of past wages up to a cap--engenders tests for spillovers from policy variation to workers who are not directly treated. We test for and find a pattern of spillovers from state-level UI policy changes that cannot be neatly reconciled with workhorse or cutting-edge models of UI spillovers. Instead, we show that the documented pattern conforms with the predictions of a canonical model of information frictions: wage posting with random search. Taken together, our results provide novel evidence ...
The ins and outs of unemployment insurance
Although the economy is rebounding, the unemployment rate remains high and private sector job gains remain weak. economists debate whether extending unemployment benefits keep unemployment artificially high by discouraging work.
Jobless and benefits