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Full-Text Articles in Social and Behavioral Sciences
Lessons From The American Federal-State Unemployment Insurance System For A European Unemployment Benefits System, Christopher J. O'Leary, Burt S. Barnow
Lessons From The American Federal-State Unemployment Insurance System For A European Unemployment Benefits System, Christopher J. O'Leary, Burt S. Barnow
Christopher J. O'Leary
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, …
Are State Unemployment Insurance Reserves Sufficient For The Next Recession?, Christopher J. O'Leary, Kenneth J. Kline
Are State Unemployment Insurance Reserves Sufficient For The Next Recession?, Christopher J. O'Leary, Kenneth J. Kline
Christopher J. O'Leary
Regular state unemployment insurance (UI) benefits are paid from state reserves held in unemployment trust fund accounts at the U.S. Treasury. Employers covered by the federal-state UI system make contributions to reserve accounts based on taxable wages. The federal government provides incentives for forward funding of benefits to support UI as an automatic macroeconomic stabilizer in the economy. However, the Great Recession exhausted UI reserves for the majority of states, and not all of them have yet replenished those reserves. Based on patterns observed over the past 40 years, in this paper we simulate the effects on state and systemwide …