The COVID-19 pandemic led to an unprecedented expansion in unemployment insurance (UI) eligibility across states. While more than forty states had modified UI rules by the end of March, not all states responded in the same way. In this article, I summarize the changes to state UI rules in response to the crisis and explore factors that have contributed to the variation in states’ responses.
{"title":"Changes in State Unemployment Insurance Rules during the COVID-19 Outbreak in the U.S.","authors":"Zoe Xie","doi":"10.29338/ph2020-02","DOIUrl":"https://doi.org/10.29338/ph2020-02","url":null,"abstract":"The COVID-19 pandemic led to an unprecedented expansion in unemployment insurance (UI) eligibility across states. While more than forty states had modified UI rules by the end of March, not all states responded in the same way. In this article, I summarize the changes to state UI rules in response to the crisis and explore factors that have contributed to the variation in states’ responses.","PeriodicalId":210867,"journal":{"name":"SIRN: Wage Replacement Policies (Topic)","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2020-04-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"126676710","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper uses administrative unemployment insurance (UI) data and an unemployment benefits extension for workers aged 45 or older in Taiwan to estimate the effects of the extended benefits on unemployment duration and reemployment outcomes. Using the regression discontinuity design, we estimate that a 90-day increase in potential duration increases the insured duration by 57 days and the non-employment duration by 41 days. While we do not find wage gains for overall UI recipients around 45 years old, the benefits extension is estimated to increase the reemployment wage for the lower-wage workers who are most likely to exhaust their benefits. Our findings suggest that the liquidity constraints at the exhaustion point might play an important role in the effect of a benefit extension on job match quality.
{"title":"The Effects of Extended Unemployment Benefits: Evidence from a Regression Discontinuity Design","authors":"Po-Chun Huang, Tzu-Ting Yang","doi":"10.2139/ssrn.3660425","DOIUrl":"https://doi.org/10.2139/ssrn.3660425","url":null,"abstract":"This paper uses administrative unemployment insurance (UI) data and an unemployment benefits extension for workers aged 45 or older in Taiwan to estimate the effects of the extended benefits on unemployment duration and reemployment outcomes. Using the regression discontinuity design, we estimate that a 90-day increase in potential duration increases the insured duration by 57 days and the non-employment duration by 41 days. While we do not find wage gains for overall UI recipients around 45 years old, the benefits extension is estimated to increase the reemployment wage for the lower-wage workers who are most likely to exhaust their benefits. Our findings suggest that the liquidity constraints at the exhaustion point might play an important role in the effect of a benefit extension on job match quality.","PeriodicalId":210867,"journal":{"name":"SIRN: Wage Replacement Policies (Topic)","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2017-09-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"117288931","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
In this paper, we evaluate the possible impact of the labor and wage policy in Bolivia’s economy in the event of a reduction in the price of exports. For this analysis, we use a CGE model with a 2012 SAM. The Bolivian labor policy is characterized by compulsory increments in the private formal wage and an expanding labor force in the public services. A labor supply function allows migration between formality and informality and a reservation wage curve differentiates the nature of unemployment in the formal and the informal sector. The labor and wage policy does three things: 1) it promotes household consumption but reduces the GDP, decreases investment and growth, 2) it increases the rate of formality only at the expense of higher unemployment, and 3) it swells the primary sector to the detriment of the secondary sector. In the face of a decrease in commodity prices, Bolivia needs to make a correction of course in the labor and wage policy.
{"title":"Trade Bust, Labor and Wage Policy in Bolivia: A CGE Approach","authors":"Rolando Morales, Danilo Agramont, Erick Gomez-Soto, Estefany Parisaca Quipse, F. Gómez, Jazmin Illanes-Yujra, Monica Cueto, Ximena Soruco","doi":"10.2139/ssrn.3163581","DOIUrl":"https://doi.org/10.2139/ssrn.3163581","url":null,"abstract":"In this paper, we evaluate the possible impact of the labor and wage policy in Bolivia’s economy in the event of a reduction in the price of exports. For this analysis, we use a CGE model with a 2012 SAM. The Bolivian labor policy is characterized by compulsory increments in the private formal wage and an expanding labor force in the public services. A labor supply function allows migration between formality and informality and a reservation wage curve differentiates the nature of unemployment in the formal and the informal sector. The labor and wage policy does three things: 1) it promotes household consumption but reduces the GDP, decreases investment and growth, 2) it increases the rate of formality only at the expense of higher unemployment, and 3) it swells the primary sector to the detriment of the secondary sector. In the face of a decrease in commodity prices, Bolivia needs to make a correction of course in the labor and wage policy.","PeriodicalId":210867,"journal":{"name":"SIRN: Wage Replacement Policies (Topic)","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2017-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127398101","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The federal government and many state governments collect individual income taxes. In this paper, I ask whether the federal government should offer to collect individual income taxes for the states and then distribute the collected taxes. I begin by making advances to the theory of joint collection and use these advances to establish a framework to analyze joint collection. I then consider the United States’ failed attempt to create a program for joint collection in 1972 and compare today’s conditions to those of 1972. I conclude by highlighting the features a new joint collection program would need to avoid the shortcomings of the 1972 attempt.
{"title":"Federal Collection of State Individual Income Taxes","authors":"Daniel Schaffa","doi":"10.2139/SSRN.2831577","DOIUrl":"https://doi.org/10.2139/SSRN.2831577","url":null,"abstract":"The federal government and many state governments collect individual income taxes. In this paper, I ask whether the federal government should offer to collect individual income taxes for the states and then distribute the collected taxes. I begin by making advances to the theory of joint collection and use these advances to establish a framework to analyze joint collection. I then consider the United States’ failed attempt to create a program for joint collection in 1972 and compare today’s conditions to those of 1972. I conclude by highlighting the features a new joint collection program would need to avoid the shortcomings of the 1972 attempt.","PeriodicalId":210867,"journal":{"name":"SIRN: Wage Replacement Policies (Topic)","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2016-08-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"129880165","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The rapid rise of China on the global economic stage could have substantial and unequal employment and wage effects in advanced industrialised democracies given China’s large volume of low-wage labour. Thus far, these effects have not been analysed in the comparative political economy literature. Building on new pooled time-series data, we analyse the effects of Chinese trade competition across 17 sectors in 18 countries between 1990 and 2007. Our empirical findings reveal overall employment declines and higher earnings inequality in sectors more exposed to Chinese imports. We devote particular attention to a new channel, increased competition from China in 59 foreign export markets, which positively affects the high-skilled whilst the low-skilled bear the brunt. Hence, this study shows that neglecting the competition in foreign countries leads to underestimation of the distributive effects of trade. More generally, our findings provide new insights into how international trade, technological change, and labour market institutions contribute to the widely observed trend of rising inequality.
{"title":"Competing with the Dragon: Employment and Wage Effects of Chinese Trade Competition in 17 Sectors Across 18 OECD Countries","authors":"Stefan Thewissen, Olaf van Vliet","doi":"10.2139/ssrn.2531299","DOIUrl":"https://doi.org/10.2139/ssrn.2531299","url":null,"abstract":"The rapid rise of China on the global economic stage could have substantial and unequal employment and wage effects in advanced industrialised democracies given China’s large volume of low-wage labour. Thus far, these effects have not been analysed in the comparative political economy literature. Building on new pooled time-series data, we analyse the effects of Chinese trade competition across 17 sectors in 18 countries between 1990 and 2007. Our empirical findings reveal overall employment declines and higher earnings inequality in sectors more exposed to Chinese imports. We devote particular attention to a new channel, increased competition from China in 59 foreign export markets, which positively affects the high-skilled whilst the low-skilled bear the brunt. Hence, this study shows that neglecting the competition in foreign countries leads to underestimation of the distributive effects of trade. More generally, our findings provide new insights into how international trade, technological change, and labour market institutions contribute to the widely observed trend of rising inequality.","PeriodicalId":210867,"journal":{"name":"SIRN: Wage Replacement Policies (Topic)","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2014-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"133957830","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The paper represents an analysis on national and counties levels of the indexes “number of unemployed people” and “unemployment rate”, but also an outline of the unemployment’s structural characteristics. This study has a temporal dimension (the interval between 1991 and 2008) and a territorial one (a detailed approach of the statistical-territorial differentiations (NUTS III, county level) of the two indexes mentioned upper. Each specific moments of the unemployment’s dynamic and each type of areas (with low or high unemployment) are analyzed in light of their causes, the main objective being to identifying the complex and changeable interdependences established between the socio-economical context, the legislative, the political ones and the unemployment phenomenon.
{"title":"Unemployment in Romania - Territorial Disparities in the Last Two Decades","authors":"I. Mocanu","doi":"10.2139/ssrn.1535827","DOIUrl":"https://doi.org/10.2139/ssrn.1535827","url":null,"abstract":"The paper represents an analysis on national and counties levels of the indexes “number of unemployed people” and “unemployment rate”, but also an outline of the unemployment’s structural characteristics. This study has a temporal dimension (the interval between 1991 and 2008) and a territorial one (a detailed approach of the statistical-territorial differentiations (NUTS III, county level) of the two indexes mentioned upper. Each specific moments of the unemployment’s dynamic and each type of areas (with low or high unemployment) are analyzed in light of their causes, the main objective being to identifying the complex and changeable interdependences established between the socio-economical context, the legislative, the political ones and the unemployment phenomenon.","PeriodicalId":210867,"journal":{"name":"SIRN: Wage Replacement Policies (Topic)","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2010-01-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130921757","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Much of the policy discussion of labor market institutions has been at the margin, with proposals to tighten unemployment benefits, reduce employment protection, and so on. There has been little discussion however of what the ultimate goal and architecture should be. The paper focuses on characterizing this ultimate goal, the optimal architecture of labor market institutions. We start our analysis with a simple benchmark, with risk averse workers, risk neutral firms and random shocks to productivity. In this benchmark, we show that optimality requires both unemployment insurance and employment protection---in the form of layoff taxes; it also requires that layoff taxes be equal to unemployment benefits. We then explore the implications of four broad categories of deviations: limits on insurance, limits on layoff taxes, ex-post wage bargaining, and heterogeneity of firms or workers. We show how the architecture must be modified in each case. The scope for insurance may be more limited than in the benchmark; so may the scope for employment protection. The general principle remains however, namely the need to look at unemployment insurance and employment protection together, rather than in isolation.
{"title":"The Optimal Design of Unemployment Insurance and Employment Protection. A First Pass","authors":"O. Blanchard, J. Tirole","doi":"10.3386/w10443","DOIUrl":"https://doi.org/10.3386/w10443","url":null,"abstract":"Much of the policy discussion of labor market institutions has been at the margin, with proposals to tighten unemployment benefits, reduce employment protection, and so on. There has been little discussion however of what the ultimate goal and architecture should be. The paper focuses on characterizing this ultimate goal, the optimal architecture of labor market institutions. We start our analysis with a simple benchmark, with risk averse workers, risk neutral firms and random shocks to productivity. In this benchmark, we show that optimality requires both unemployment insurance and employment protection---in the form of layoff taxes; it also requires that layoff taxes be equal to unemployment benefits. We then explore the implications of four broad categories of deviations: limits on insurance, limits on layoff taxes, ex-post wage bargaining, and heterogeneity of firms or workers. We show how the architecture must be modified in each case. The scope for insurance may be more limited than in the benchmark; so may the scope for employment protection. The general principle remains however, namely the need to look at unemployment insurance and employment protection together, rather than in isolation.","PeriodicalId":210867,"journal":{"name":"SIRN: Wage Replacement Policies (Topic)","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2004-04-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"122520440","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 1998-10-01DOI: 10.5089/9781451922745.001.A001
A. Thomas
The paper investigates the relationship between labor taxation and unemployment in Sweden by estimating a labor market model that includes a wage-setting locus and labor demand and supply relationships. The study simulates the effect of a 1 percentage point increase in the payroll tax and in total tax rates. The increase in the payroll tax pushes up labor costs by about ½ percent over a 5-10 year time horizon. Hours worked fall by 0.5 percent and the unemployment rate rises by 0.3 percentage point. The increase in total tax rates generates a similar result. Therefore, it appears that increases in taxes have adversely affected employment and unemployment in Sweden.
{"title":"The Effects of Tax Wedges on Hours Worked and Unemployment in Sweden","authors":"A. Thomas","doi":"10.5089/9781451922745.001.A001","DOIUrl":"https://doi.org/10.5089/9781451922745.001.A001","url":null,"abstract":"The paper investigates the relationship between labor taxation and unemployment in Sweden by estimating a labor market model that includes a wage-setting locus and labor demand and supply relationships. The study simulates the effect of a 1 percentage point increase in the payroll tax and in total tax rates. The increase in the payroll tax pushes up labor costs by about ½ percent over a 5-10 year time horizon. Hours worked fall by 0.5 percent and the unemployment rate rises by 0.3 percentage point. The increase in total tax rates generates a similar result. Therefore, it appears that increases in taxes have adversely affected employment and unemployment in Sweden.","PeriodicalId":210867,"journal":{"name":"SIRN: Wage Replacement Policies (Topic)","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"1998-10-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"126614115","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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