Eligibility, experience rating, and unemployment insurance take-up

• 成果类型: Article
• 署名作者: Auray, Stephane; Fuller, David L.
• 署名单位: Ecole Nationale de la Statistique et de l'Analyse de l'Information (ENSAI); Universite du Littoral-Cote-d'Opale; University of Wisconsin System
• 刊物名称: QUANTITATIVE ECONOMICS
• ISSN/ISSBN: 1759-7323
• DOI: 10.3982/QE940
• 发表日期: 2020
• 页码: 1059-1107
• 关键词: Unemployment insurance; take-up rate; experience rating; matching frictions; search; E61; J32; J64; J65

摘要

In this paper, we investigate the causes and consequences of unclaimed unemployment insurance (UI) benefits. A search model is developed where the costs to collecting UI benefits include both a traditional fixed administrative cost and an endogenous cost arising from worker and firm interactions. Experience rated taxes give firms an incentive to challenge a worker's UI claim, and these challenges are costly for the worker. Exploiting data on improper denials of UI benefits across states in the U.S. system, a two-way fixed effects analysis shows a statistically significant negative relationship between the improper denials and the UI take-up rate, providing empirical support for our model. We calibrate the model to elasticities implied by the two-way fixed effects regression to quantify the relative size of these UI collection costs. The results imply that on average the costs associated with firm challenges of UI claims account for 41% of the total costs of collecting, with improper denials accounting for 8% of the total cost. The endogenous collection costs imply the unemployment rate responds much slower to changes in UI benefits relative to a model with fixed collection costs. Finally, removing all eligibility requirements and allowing workers to collect UI benefits without cost shows these costs to be 4.5% of expected output net of vacancy costs. Moreover, this change has minimal impact on the unemployment rate.