PT  - JOURNAL ARTICLE
AU  - Huang, Po-Chun
TI  - Employment Effects of the Unemployment Insurance Tax Base
AID  - 10.3368/jhr.0719-10316R2
DP  - 2022 Mar 09
TA  - Journal of Human Resources
PG  - 0719-10316R2
4099  - http://jhr.uwpress.org/content/early/2022/03/01/jhr.0719-10316R2.short
4100  - http://jhr.uwpress.org/content/early/2022/03/01/jhr.0719-10316R2.full
AB  - I investigate the extent to which the low unemployment insurance (UI) tax base in the United States creates disincentives to hire low-wage workers. Using data from the Current Population Survey and state variation in the UI tax base over 30 years, I show that a 10% nominal increase in the base raises the teenage employment rate by 1.2%. It raises teen/adult and highschool/college grad employment. Indexing the tax base increases the teenage employment rate by 6%. The erosion of the UI tax base has thus reduced the employment of low-wage workers.