Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/250681 
Year of Publication: 
2022
Series/Report no.: 
IZA Discussion Papers No. 15020
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
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.
Subjects: 
payroll taxes
tax base
unemployment insurance
experience rating
JEL: 
D22
H22
H25
H71
J23
J32
J38
J65
Document Type: 
Working Paper

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