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The authors reexamine the experience rating provisions in the U.S. UI system and look at its effects on both temporary layoffs and long-term permanent layoffs. For temporary layoffs, they propose a higher degree of experience rating through a restructuring of the tax code while eliminating administrative time lags between the payment of benefits and the resulting changes in taxes. Brechling and Laurence also propose experience rating as an effective means of internalizing the costs of the growing number of permanent layoffs, making the case that payroll taxes are not the ideal means of implementing experience rating in this situation. In addition, they compare how the reserve and benefit ratio methods of experience rating internalize the costs of permanent layoffs.


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  1. Introduction and Summary
  2. Principles of Insurance and the Current Structure of U.S. Unemployment Insurance Financing
  3. Recent Trends in Permanent and Temporary Layoffs
  4. Funding Reemployment Costs When Job Losses are Permanent
  5. Appendix to Chapter 4
  6. Financing the Costs of Permanent Job Losses Under the Reserve and Benefit Ratio Methods
  7. Policy Recommendations for Improving Unemployment Insurance Financing


Financial support for research from the Upjohn Institute


9780880991605 (cloth) ; 9780880991599 (pbk.) ; 9780585283012 (ebook)

Subject Areas

UNEMPLOYMENT, DISABILITY, and INCOME SUPPORT PROGRAMS; Unemployment insurance; Benefits and duration

Permanent Job Loss and the U.S. System of Financing Unemployment Insurance




Brechling, Frank P., and Louise Laurence. 1995. Permanent Job Loss and the U.S. System of Financing Unemployment Insurance. Kalamazoo, MI: W.E. Upjohn Institute for Employment Research.

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