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Wage Insurance as a Policy Option in the United States

Author

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  • Stephen A. Wandner

    (Urban Institute and W.E. Upjohn Institute for Employment Research)

Abstract

Wage insurance is a program that attempts to help permanently displaced workers transition to employment rapidly, effectively, and equitably. Because displaced workers have been found to suffer substantial earnings losses when they become reemployed, a wage insurance program provides a temporary wage supplement that partially reduces the wage loss experienced by targeted, newly reemployed workers. While participating workers receive a “wage supplement,” the program is called “wage insurance” because of its design as a social insurance program rather than an income transfer program. This paper provides a discussion of the development of wage insurance as a policy option in the United States and proposals that have had varying goals and designs.

Suggested Citation

  • Stephen A. Wandner, 2016. "Wage Insurance as a Policy Option in the United States," Upjohn Working Papers 16-250, W.E. Upjohn Institute for Employment Research.
    • Handle: RePEc:upj:weupjo:16-250
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    File URL: http://research.upjohn.org/cgi/viewcontent.cgi?article=1268&context=up_workingpapers
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    References listed on IDEAS

    as
    1. Philip K. Robins & Charles Michalopoulos & Kelly Foley, 2008. "Are Two Carrots Better Than One? The Effects of Adding Employment Services to Financial Incentive Programs for Welfare Recipients," ILR Review, Cornell University, ILR School, vol. 61(3), pages 410-423, April.
    2. Carl Davidson & Stephen A. Woodbury, 2000. "Wage-Rate Subsidies for Dislocated Workers," Book chapters authored by Upjohn Institute researchers, in: Laurie J. Bassi & Stephen A. Woodbury (ed.),Long-term Unemployment and Reemployment Policies, pages 141-184, W.E. Upjohn Institute for Employment Research.
    3. Woodbury, Stephen A & Spiegelman, Robert G, 1987. "Bonuses to Workers and Employers to Reduce Unemployment: Randomized Trials in Illinois," American Economic Review, American Economic Association, vol. 77(4), pages 513-530, September.
    4. Christopher J. O’Leary & Paul T. Decke & Stephen A. Wandner, 2005. "Cost-Effectiveness of Targeted Reemployment Bonuses," Journal of Human Resources, University of Wisconsin Press, vol. 40(1).
    5. Lawrence F. Katz, 1996. "Wage Subsidies for the Disadvantaged," NBER Working Papers 5679, National Bureau of Economic Research, Inc.
    6. Burt S. Barnow, 1987. "The Impact of CETA Programs on Earnings: A Review of the Literature," Journal of Human Resources, University of Wisconsin Press, vol. 22(2), pages 157-193.
    7. Lori G. Kletzer & Robert E. Litan, 2001. "A Prescription to Relieve Worker Anxiety," Policy Briefs PB01-02, Peterson Institute for International Economics.
    8. Betcherman, Gordon & Olivas, Karina & Dar, Amit, 2004. "Impacts of active labor market programs : new evidence from evaluations with particular attention to developing and transition countries," Social Protection Discussion Papers and Notes 29142, The World Bank.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Pierre Cahuc, 2018. "Wage Insurance, Part-Time Unemployment Insurance and Short-Time Work in the XXI Century," Working Papers hal-03393111, HAL.
    2. repec:spo:wpmain:info:hdl:2441/42uqs7948j8nfahfgmbdn90hje is not listed on IDEAS
    3. Fischer, Georg, 2017. "The US Unemployment Insurance, a Federal-State Partnership: Relevance for Reflections at the European Level," IZA Policy Papers 129, Institute of Labor Economics (IZA).
    4. Tito Boeri & Pierre Cahuc, 2022. "Labor Market Insurance Policies in the XXI Century," SciencePo Working papers Main hal-03878719, HAL.
    5. Donald O. Parsons, 2023. "How should job displacement wage losses be insured?," IZA World of Labor, Institute of Labor Economics (IZA), pages 446-446, July.
    6. Brad J. Hershbein & Harry J. Holzer, 2021. "The COVID-19 Pandemic's Evolving Impacts on the Labor Market: Who's Been Hurt and What We Should Do," Upjohn Working Papers 21-341, W.E. Upjohn Institute for Employment Research.
    7. Joern Kleinert, 2018. "Globalization Effects on the Distribution of Income," Graz Economics Papers 2018-07, University of Graz, Department of Economics.
    8. repec:hal:spmain:info:hdl:2441/42uqs7948j8nfahfgmbdn90hje is not listed on IDEAS
    9. Pierre Cahuc, 2018. "Wage Insurance, Part-Time Unemployment Insurance and Short-Time Work in the XXI Century," SciencePo Working papers hal-03393111, HAL.

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    More about this item

    Keywords

    wage insurance; unemployment insurance; displaced workers; trade adjustment assistance; earnings losses; wage supplement;
    All these keywords.

    JEL classification:

    • J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings
    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy

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