If You Build It: State Unemployment Insurance Trust Solvency And Benefit Generosity

There is little empirical research on the determinants of Unemployment Insurance (UI) benefit generosity, especially in the American states. However, UI benefit generosity is thought to be a function of state UI trust fund adequacy. Adequacy, or solvency, is traditionally measured by one of three figures. The first is the Reserve Ratio (RR), which is the ratio of a state's year-end unemployment trust fund balance to covered wages for that year. The second is the High-Cost Multiple (HCM), which is a ratio with the RR in the numerator, and the highest 12-month benefit payout in the state's history as a percentage of covered wages for that period in the denominator.

Provided by: New York University Topic: CXO Date Added: Jan 2011 Format: PDF

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