The impact of unemployment insurance taxes on wages

This paper examines the incidence of state unemployment insurance taxes on wages paid to workers in various demographic groups. The empirical work matches state level measures of unemployment insurance tax and benefit variables to data aggregated from the Current Population Survey on worker earnings for the period 1992 to 2002. Econometric evidence presented in the paper supports the paper's main hypothesis that UI tax rate structure has its greatest adverse impact on less mobile workers (prime age married women and young workers) and little impact on more mobile workers (prime age men).