Upjohn Institute Working Paper No. 00-62

**Published Version**

New England Economic Review: Federal Reserve Bank of Boston (March/April 1999): 15-40. Under title New Ways of Evaluating State Unemployment Insurance




Comparisons among state unemployment insurance (UI) systems can be misleading. Frequently quoted indicators of benefit generosity, tax cost, and adherence to the experience-rating principle are influenced by the relative economic conditions of states. Such comparisons thereby obscure underlying structural differences in state UI systems. A business considering alternative states in which to locate a production facility should be cautious when interpreting UI information in an economic developer's marketing pitch. This paper offers alternative indicators based on how representative firms, with a well specified unemployment experience, would fare in different states. The authors use a micro-simulation approach to model the experiences of representative workers and firms to compare 28 states and contrast the results with those obtained from more conventional indicators. In closing, the authors consider whether a business location decision would be influenced differently by the alternative measures of state UI systems.

Issue Date

January 2000


Prepared for the Society of Government Economists meetings at the Allied Social Sciences Associations Conference January 7-9, 2000, Boston, Massachusetts; Series statement Upjohn Institute staff working paper no. 00-62 from external sources

Subject Areas

ECONOMIC DEVELOPMENT; Regional policy and planning; Business and tax incentives; UNEMPLOYMENT, DISABILITY, and INCOME SUPPORT PROGRAMS; Unemployment insurance; Benefit financing


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O'Leary, Christopher J., Robert Tannenwald, Wei-Jang Huang, and Pei Zhu. 2000. "Alternative Measures of State UI Systems." Upjohn Institute Working Paper No. 00-62. Kalamazoo, MI: W.E. Upjohn Institute for Employment Research.