Unemployment Insurance Financing Options in Massachusetts

Research Report

Unemployment Insurance Financing Options in Massachusetts

December 31, 2003

Abstract

This report describes and analyzes the main proposals offered during 2003 to modify the financing of unemployment insurance (UI) in Massachusetts. It includes a brief historical review of the state's UI funding from the late 1960s to the present. The proposals are described and compared with attention to setting tax rates to improve the assignment of benefit charges to individual employers. The paper also undertakes a simulation analysis of changes in the UI taxable wage base. Recommendations are made to improve UI financing. An annex examines legislation of late November 2003 in light of the analysis of the report.

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