The experience of Washington State provides a natural setting to examine the effects of the unemployment insurance payroll tax on layoffs, employment, and wages. During the 13-year period from 1972 through 1984, all employers in Washington paid the same unemployment insurance (UI) tax rate....

In this paper we theoretically and empirically examine the common, but previously unexamined, case of a firm-varying tax that is used to finance a fringe benefit. While we use data from the experience-rated unemployment insurance (UI) system, it is important to realize that differential...