Would Broadening the UI Tax Base Help Low-Income Workers?

Arbeitspapier

The tax base for state unemployment insurance (UI) programs varies significantly in the U.S., from a low of $7,000 annually in California to a high of $52,700 in Washington. Previous research has provided surprisingly little guidance to policy makers regarding the tradeoffs associated with this variation. In this paper, we use 37 years of data for all 50 states and Washington, D.C. to estimate the impact of the UI tax base on labor-market outcomes. We find that the low tax base that exists in California and many other states (and the necessarily higher tax rates that accompany these) negatively affects labor market outcomes for part-time and other low-earning workers.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IZA Discussion Papers ; No. 15020

Classification and Topics

• Classification: Wirtschaft ; Firm Behavior: Empirical Analysis ; Taxation and Subsidies: Incidence ; Business Taxes and Subsidies including sales and value-added (VAT) ; State and Local Taxation, Subsidies, and Revenue ; Labor Demand ; Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions ; Wages, Compensation, and Labor Costs: Public Policy ; Unemployment Insurance; Severance Pay; Plant Closings
• Subject: payroll taxes ; tax base ; unemployment insurance ; experience rating

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Duggan, Mark ; Guo, Audrey ; Johnston, Andrew C.
• Event: Veröffentlichung
• (who): Institute of Labor Economics (IZA)
• (where): Bonn
• (when): 2022

Further information

• Handle: http://hdl.handle.net/10419/250681
• Last update: 10.03.2025, 11:41 AM CET