TY  - JOUR
AU  - Anderson,Patricia M.
AU  - Meyer,Bruce D.
TI  - The Effects of Unemployment Insurance Taxes and Benefits on Layoffs Using Firm and Individual Data
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 4960
PY  - 1994
Y2  - December 1994
UR  - http://www.nber.org/papers/w4960
L1  - http://www.nber.org/papers/w4960.pdf
N1  - Author contact info:
Patricia M. Anderson
Department of Economics
Dartmouth College
6106 Rockefeller
Hanover, NH  03755-3514
Tel: 603/646-2532
Fax: 603/646-2122
E-Mail: patricia.m.anderson@dartmouth.edu

Bruce D. Meyer
Harris School of Public Policy
University of Chicago
1155 E. 60th Street
Chicago, IL 60637
Tel: 773/702-2712
Fax: 773/702-0926
E-Mail: bdmeyer@uchicago.edu
AB  - We examine the effects of unemployment insurance (UI) experience rating on layoffs using high quality firm and individual data.  Our preferred estimates imply that incomplete experience rating is responsible for over twenty percent of temporary layoffs.  The results are more mixed regarding the predictions of the alternative models of UI as a firm adjustment cost or a component of the worker compensation package.  While the evidence favors the adjustment cost model, some of the predictions of each of these models are rejected by at least one of our specifications.  Using our new data, we also confirm the correlation between experience rating proxies and layoffs found in past studies.  However, the differences between these proxies and state average firm tax costs and the anomalous instrumental variables estimates that we find suggest that it may be inappropriate to causally interpret this correlation.
ER  -