TY  - JOUR
AU  - Card, David
AU  - Levine, Phillip B
TI  - Unemployment Insurance Taxes and the Cyclical and Seasonal Properties of Unemployment
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 4030
PY  - 1992
Y2  - March 1992
DO  - 10.3386/w4030
UR  - http://www.nber.org/papers/w4030
L1  - http://www.nber.org/papers/w4030.pdf
N1  - Author contact info:
David Card
Department of Economics
549 Evans Hall, #3880
University of California, Berkeley
Berkeley, CA  94720-3880
Tel: 510/642-5222
Fax: 510/643-7042
E-Mail: card@econ.berkeley.edu

Phillip B. Levine
Department of Economics
Wellesley College
106 Central Street
Wellesley, MA 02481
Tel: 781/283-2162
Fax: 781/283-2177
E-Mail: plevine@wellesley.edu
AB  - 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.
ER  -