There Has Been Considerable Debate as to the Appropriate Level

question 42

Essay

There has been considerable debate as to the appropriate level of Employment Insurance benefits paid out to unemployed workers.Suppose the government increases the level of Employment Insurance benefits.What would happens to the incentive to search,the size of the labour force,and the unemployment rate in the long run?

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Definitions:

FICA Taxes

FICA Taxes are payroll taxes collected to fund the Social Security and Medicare programs, split between the employer and the employee.

Payroll Tax Expense

The taxes that employers are required to withhold and pay on behalf of their employees, including Social Security and Medicare taxes.

State Unemployment Taxes

Taxes paid by employers to the state to fund unemployment insurance programs for workers who have lost their jobs.

Federal Unemployment Taxes

Taxes imposed by the federal government on employers to fund unemployment benefits for workers who have lost their jobs.