Unemployment Insurance Taxes and the Cyclical and Seasonal Properties of Unemployment / David Card, Phillip B. Levine.

Format:

Book

Author/Creator:

Card, David.

Contributor:

National Bureau of Economic Research.

Levine, Phillip B.

Series:

Working Paper Series (National Bureau of Economic Research) no. w4030.

NBER working paper series no. w4030

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 1992.

Summary:

We combine Current Population Survey microdata for 1979-1987 with a newly assembled database of tax rates for the Unemployment Insurance system to measure the effects of imperfect experience-rating on temporary layoffs and other types of unemployment. We find a strong negative association between the degree of experience-rating and the rate of temporary layoff unemployment, with the largest effect in recessionary years and the smallest effect in expansionary years. Increases in the degree of experience-rating are also associated with dampened seasonal fluctuations in temporary layoffs, particularly in construction and durable manufacturing. The correlation between the degree of experience-rating and the unemployment rate of permanent job losers is smaller but also negative, whereas the correlation with the unemployment Me of job quitters and re-entrants is negligible. Attempts to control for the endogeneity of unemployment insurance taxes are consistent with a causal interpretation of our findings.

Notes:

Print version record

March 1992.