Brief Rethinking Unemployment Insurance Taxes and Benefits
Ryan Nunn, David Ratner
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Unemployment Insurance (UI) serves a core purpose that is intuitive for both economists and noneconomists: it provides insurance against the risk of job loss. Because employment is the only or primary source of income for most families, job loss often delivers a financial blow that would be crippling absent any insurance. Moreover, the need to fund UI has important consequences for employers in the form of experience-rated taxes. In this brief, we outline principles for the optimal design of both the worker- and employer-facing aspects of UI, grounding these principles in the relevant literature.

Primary topic Individual Taxes
Research Area Fundamental reform proposals Economic effects of tax policy Federal spending Unemployment taxes and compensation