Suppose that the UI system is structured so that the minimum tax rate is 1.5 percent, the
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Suppose that the UI system is structured so that the minimum tax rate is 1.5 percent, the maximum tax rate is 6.2 percent, and the tax rate in between is calculated according to the following formula: t =
.1 + 2.4l, where t = the employer’s UI tax rate and l = the employer’s layoff experience.
Layoff experience is the probability that employees in the firm will be on layoff, expressed as a percentage of the firm’s workforce, and generally lies in the range of less than 1 percent to 5 percent. Graph this tax rate formula, and calculate the firm’s critical value of layoff experience
(lmin) and ceiling value of layoff experience
(lmax).
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Related Book For
Modern Labor Economics Theory And Public Policy
ISBN: 9780132540643
11th Edition
Authors: Ronald Ehrenberg, Robert Smith
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