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Lessons From The American Federal-State Unemployment Insurance System For A European Unemployment Benefits System, Christopher J. O'Leary, Burt S. Barnow, Karolien Lenaerts
Lessons From The American Federal-State Unemployment Insurance System For A European Unemployment Benefits System, Christopher J. O'Leary, Burt S. Barnow, Karolien Lenaerts
Upjohn Institute Working Papers
The federal-state system of unemployment insurance (UI) in the United States was established by the Social Security Act of 1935 during the Great Depression. Under the program, states provide temporary partial wage replacement to involuntarily unemployed workers with significant labor force attachment. The federal government induced states to establish UI programs through two means: 1) a uniform federal tax imposed on employer payrolls, with a 90 percent reduction granted in states operating approved UI programs, and 2) grants to states to administer their programs. The system has evolved into a collection of separate state programs adapted to different regional, economic, …