Research by Author & Topic

Publications by Wayne Vroman on Unemployment Insurance

Short time compensation (STC or work sharing) is a labor adjustment measure designed to reduce or eliminate reliance on layoffs when firms need to reduce hours worked. It spreads the reduction in hours among a wide pool of workers and provides partial unemployment compensation (UC) for the reduced hours. This paper examines STC with attention to experiences in Canada and Germany as well as the United States. It also suggests ways to increase STC use in the United States.

This paper examines data on unemployment compensation programs across a sample of 150 large countries that account for 99 percent of the world's population. It documents recipiency rates and replacement rates in the 66 countries with UC programs. It makes comparisons of the degree of earnings loss protection in countries arranged by geographic area and by income level. Overall it finds that UC replaces 11.7 percent of the earnings losses caused by unemployment.

The economic stimulus bill enacted on February 17, 2009 has several provisions related to unemployment insurance (UI). Several governors have objected to some provisions. In this document, Senior Fellow Wayne Vroman, an economist and researcher on UI, answers key questions about the program changes.

This short paper summarizes the current situation of state unemployment insurance (UI) programs in the United States. It describes benefit recipiency, UI trust fund balances and administrative financing. Policies are recommended to increase solvency of the trust funds, raise recipiency rates and to improve the adequacy of administrative funding.

Vroman recommended that Ohio raise unemployment taxes and freeze the maximum weekly jobless benefit to get its unemployment insurance (UI) program back on its feet. Like a number of other states, Ohio's unemployment trust fund is running out of money. While the recession has hastened insolvency in some UI programs—unemployment claims rising while tax revenue falls—it isn't the sole cause. Reserves in Ohio and several other states have failed to grow with the economy for years. Vroman answers five questions about his recommendations and applicable lessons for all states.
Read the full interview

This report examines benefit payments in Ohio’s unemployment insurance (UI) program. The report compares average recipiency rates and replacement rates with national averages over the past four decades. It then reviews detailed aspects of benefit recipiency including monetary eligibility, first payment rates, benefit duration and replacement rates. The report identifies four areas where access to benefits could be broadened: reduced base period earnings requirements, enhanced eligibility for part-time workers, establishment of worksharing and establishment of self-employment assistance.

This paper examines developments in aggregate income and the labor market of the 28 countries from Central and Eastern Europe and the Former Soviet Union (CEE-FSU) in the period from 1990 to 2006. Income, employment, unemployment and labor market support services are examined in tabulations and time series regressions. Comparisons are made with developments in major countries from other regions of the world.

This report presents an actuarial framework for examining the costs of unemployment compensation (UC) programs. The framework, derived in Section 1, emphasizes three factors: (1) the unemployment rate, (2) the recipiency rate (the share of the unemployed who collect UC benefits) and (3) the replacement rate (weekly benefits relative to weekly wages). Sections 2 and 3 examine replacement rates in 20 high income countries from the Organization for Economic Cooperation and Development (OECD). Section 2 examines empirical replacement rates while Section 3 compares the empirical estimates from Section 2 with estimates published by the OECD. The two estimates differ substantially, and analysis of the cause(s) of the differences is recommended.

This report examines issues in unemployment insurance (UI) benefit payments and trust fund modeling in Washington State. It reviews recent legislation from the years 2003 to 2006. It estimates the reductions in benefit payouts caused by several specific restrictions on benefit payments resulting from the legislation. The report includes recommendations for further modifications in benefits, many of which were incorporated into legislation of March 2006. The report also reviews the actuarial models used in Washington to project future UI trust fund balances. It makes recommendations to improve simulation modeling.

This paper describes the evolution of unemployment in recent years (the rate of unemployment occurrences and average unemployment duration) and highlights variation in unemployment by gender, age, ethnicity and educational attainment using national data. It then demonstrates the wide variation in receipt of unemployment insurance (UI) benefits by states. It also identifies several state-level factors related to recipiency rate variation. Finally, it suggests changes that would increase UI recipiency in the states.