Panel: Unemployment Insurance: Needed Policy Changes and Existing Policy Constraints
(Employment and Training Programs)

Saturday, November 8, 2014: 8:30 AM-10:00 AM
Enchantment Ballroom B (Hyatt)

*Names in bold indicate Presenter

Panel Organizers:  Alix Gould-Werth, University of Michigan
Panel Chairs:  Heather Hill, University of Washington
Discussants:  Robert I. Lerman, American University

Reforming the Unemployment Insurance Payroll Tax: How Would Major Changes Alter Funding Adequacy and Cross-Subsidies?
Stephen Woodbury, Michigan State University and Kenneth Kline, W.E. Upjohn Institute for Employment Research

My Boss' Business? the Employer's Role in Unemployment Benefit Access
Alix Gould-Werth, Mathematica Policy Research

Unemployment Insurance (UI) is the major US social program intended to stabilize the income of workers who experience job loss and to stabilize the macroeconomy during times of economic contraction. This state-federal partnership was first implemented in 1935, and the program structure and rules have been slow to respond to the changed nature of work arrangements in the contemporary era. However, the federal government has made several attempts to modernize the UI systemómost recently the inclusion of UI modernization provisions in the American Reinvestment and Recovery Act (ARRA). Drawing on qualitative data, survey research, administrative data and comparative historical methods the papers included in this panel provide preliminary answers to the questions: 1) what UI program changes are needed in the contemporary era? And, 2) why, in the near and more distant past, have states been reticent to make these types of changes? The goal of this panel is to stimulate thought on which needed policy changes are most likely to be feasible given extant political considerations. The panelís first two papers draw attention to problems with the UI program that could be addressed through policy change. The first paper, by Vroman, highlights challenges to UI financing following the Great Recession. The paper examines the trust fund levels of states before and following the recession, and describes state responses to trust fund drawdowns. The paper emphasizes the precarious funding situation faced by large states particularly. The second paper, by Gould-Werth, draws on in-depth qualitative interviews with job losers of diverse sociodemographic profiles to examine micro-level consequences of the experience rating system that funds the UI program, and barriers to UI receipt for disadvantaged workers. The paper concludes with policy recommendations for addressing these issues. The panelís latter two papers focus on determinants of policy change. The third paper, by Mastri et al, uses a survey of 51 state UI administrators to determine why, during the recent downturn, some states chose not to adopt incentivized changes to the UI program. The paper finds some adoption decisions to be relatively apolitical and focused on cost alone, while the failure to adopt less expensive changes to the UI program appear to be driven by philosophical and political considerations. The final paper, by Hertel-Fernandez, takes a comparative historical approach to understand why, over time, the Canadian UI system has become more generous than the American UI system. This paper finds that the financing mechanisms of the Canadian system result in an alignment of labor and business interest, which allowed the program to expand, while in the US case, the divergent interests of labor and business have resulted in a political environment in which change is difficult to implement. We expect that, with the discussant's comments, these four papers will stimulate productive discussion on why our UI system has been slow to modernize and what steps can be taken-- in today's political context-- in order to ensure that UI meets its program objectives in today's economy.
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