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Unemployment Insurance and Employment
Donald R. Deere
Journal of Labor Economics
Vol. 9, No. 4 (Oct., 1991), pp. 307-324
Published by: The University of Chicago Press on behalf of the Society of Labor Economists and the NORC at the University of Chicago
Stable URL: http://www.jstor.org/stable/2535073
Page Count: 18
You can always find the topics here!Topics: Employment, Layoffs, Taxes, Unemployment, Unemployment insurance, Estimated taxes, Subsidies, Real estate industry, Construction industries, Economic conditions
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This article examines the impact of unemployment insurance (UI) on the allocation of labor across industries. An overlooked aspect of UI is the effect of imperfect experience rating on hiring. Firms in more stable industries generally pay more into the UI system than their workers ever receive in benefits, thus subsidizing more volatile industries. The results indicate that industry employment shares are significantly affected by UI and that there is a net shift of resources from the service industry to the construction industry. The estimates also imply that layoff unemployment is increased by about 5% because of UI-induced employment shifts.
Journal of Labor Economics © 1991 The University of Chicago Press