Maura Healey, Governor
Lauren Jones, Secretary
Executive Office of Labor
and Workforce Development
Unemployment Quarterly Outlook– April 2023
Introduction
About the Massachusetts Unemployment Insurance Program
Unemployment Insurance (UI) is an economic stabilization program implemented under federal and state law that
provides a safety net for workers who become separated from employment due to no fault of their own. The UI program
provides temporary benefits to unemployed workers from the Massachusetts Department of Unemployment Assistance’s
(DUA) Unemployment Insurance Trust Fund (UI Trust Fund). Employer-paid state unemployment taxes and
reimbursements fund the UI Trust Fund and pay for benefits. The United States Department of Labor (USDOL) allocates
funds from the Federal Unemployment Tax Act (FUTA) to the state to pay for DUA administrative and operational costs.
Additional information, including past reports, can be found at https://mass.gov/uitrustfund.
Those seeking further information regarding the UI Trust Fund can email economicresearch@mass.gov.
The projections, forecasts, estimates, and other forward-looking statements contained in this Outlook Report are subject
to a variety of risks and uncertainties that may cause actual results to differ from the projections set forth. DUA uses
information from sources that are believed to be reliable; however, DUA assumes no responsibility for information from
sources outside the Commonwealth and its agencies.
Summary
This Outlook Report provides the status of the UI Trust Fund and updated projections for the 2023 through 2027 outlook
period.
As required by MGL Chapter 151A, Section 14F, DUA publishes an annual report and quarterly outlooks for the UI Trust
Fund based on forecasts for total unemployment rate, annual wage and salary growth rate, and annual labor force. In
addition to those statutory requirements, DUA also provides monthly updates on the status of the UI Trust Fund on the
dashboard found at https://mass.gov/uitrustfund.
Projections of wage and salary growth, total unemployment rate, and the size of the labor force in Massachusetts for
each calendar year of the Outlook Period (2023-2027) are represented in Figure 2 through Figure 5. For purposes of the
projection estimates contained in this Outlook Report, the Quarterly Census of Employment and Wages (QCEW) was the
primary source for historical actual data on wages and salaries and size of the labor force. Local Area Unemployment
Statistics (LAUS) were the primary source for official unemployment rates. DUA relied on Moody's Analytics (Moody's),
forecasts dated March 2023 to inform this quarterly report. Moody’s forecasts were used to project historical QCEW and
LAUS data over the Outlook Period for wage and salary growth, total unemployment rate, and size of labor force.
The outlook presented is for the regular UI program based on 2022 employer experience rates and claims activities
through the first quarter of 2023. Key findings on the year follow.
• Employer contributions for the 1st Quarter of 2023 are estimated to be approximately $647.5 million with a 2023
projected year-end total estimated to be $1.14 billion. 1
• Benefit payments are approximately $592.4 million through March 31, 2023, with a 2023 projected year-end total
estimated to be $1.64 billion.
• The balance of the UI Trust Fund on March 31, 2023 was $3.49 billion on a cash basis. After anticipated
payment of expected contributions attributable to Q1 and due by April 30th, the expected balance is projected to
be $3.98 billion. The 2023 UI Trust Fund year-end balance is projected to be $3.47 billion.
1
1st Quarter payments are estimated because current year 1st Quarter payments are not yet due. Actual employer contributions including the first
quarterly payment period due on April 30th of each year and are expected to be reported in the Monthly Report on or about May 15. Amounts published
herein may differ from amounts published on TreasuryDirect due to differences in payment timing.
Unemployment Insurance Trust Fund Annual Outlook Report APRIL 2023
Table of Contents
Introduction........................................................................................................................................................... 1
About the Massachusetts Unemployment Insurance Program ....................................................................... 1
Summary........................................................................................................................................................... 1
Projection of Balance and Solvency ...................................................................................................................... 3
Federal Advances, Bond Issuance and Covid-19 Recovery Assessment .......................................................... 4
Economic Basis for Projections......................................................................................................................... 4
Summary of Projected Inflows .............................................................................................................................. 7
Summary of Projected Outflows ........................................................................................................................... 8
Appendix 1: Detailed Programmatic Background and Methodology ................................................................... 9
Experience Rate Table ...................................................................................................................................... 9
Economic Projections Methodology............................................................................................................... 11
Sources............................................................................................................................................................ 11
Unemployment Insurance Definitions............................................................................................................ 12
Appendix 2: Data Projections Tables................................................................................................................... 14
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Unemployment Insurance Trust Fund Annual Outlook Report APRIL 2023
Projection of Balance and Solvency
As of March 31, 2023, the month-end Massachusetts UI Trust Fund ending cash balance was $3.49 billion. The
expected balance after full payment of Q1 taxes is expected to be $3.98 billion (Figure 1). For an accessible version of
the data in all charts, please see Appendix 2: Data Projections Tables.
Projections
To project future UI Trust Fund solvency, DUA utilizes forecasts prepared using a model describe in Appendix 1. The
model is based on QCEW actual wage and salary data for the period ending December 31, 2022. The QCEW total
payrolls are projected forward by taking growth rates from the Moody’s wage and salary projections. The forecasts on
wage and salary growth, unemployment rate, and size of the labor force for calendar years 2023 through 2027 are
shown in Figure 3 through Figure 5. For accessible version of data in Figure 1 below, please see Appendix 2.
Figure 1: UITF Balance at End of Quarter, 2022-2027
$4.5
Dollars (in Billions)
$4.0
$3.5
$3.0
$2.5
$2.0
$1.5
$1.0
$0.5
$0.0 I
Shaded area denotes projection years
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Unemployment Insurance Trust Fund Annual Outlook Report APRIL 2023
Federal Advances, Bond Issuance and Covid-19 Recovery Assessment
The federal-state unemployment insurance system and the Massachusetts unemployment insurance program played a
critical role in delivering economic relief to individuals and families experiencing economic hardship during the Covid-19
pandemic. From June 2020 to April 2021, the Commonwealth borrowed $2.268 billion of Federal Advances to pay
benefits. In March 2022, $500 million of the borrowed amount was repaid from ARPA funds.
In August 2022, $2.681 billion in special obligation bonds were issued pursuant to the UI Improvement Act (Chapter 9 of
the Acts of 2021) and proceeds were used to (i) repay the outstanding Federal Advances as well as the accrued interest
on such Federal Advances; (ii) fund a deposit to the UI Trust Fund in the amount of $867.6 million to pay unemployment
compensation benefits to qualifying persons in the Commonwealth; and (iii) pay bond issuance costs.
The UI Improvement Act provided that a Covid-19 Recovery Assessment will be charged to experience-rated, private
contributory employers for each year the bonds are outstanding. For 2021 and 2022, the Covid-19 Recovery Assessment
was set at $150 million. For 2023 and until no bonds remain outstanding, the Commonwealth will assess employers a
Covid-19 Recovery Assessment which must be at least 125% of the annual debt service on the bonds. The Covid-19
Assessment is in addition to the SUTA tax charged and is a fixed percentage of each employer’s SUTA rate. The Covid-
19 Recovery Assessment will be credited to a special contribution fund held by the bond trustee.
Based on assumptions used at the time of issuing the bonds, the projected Covid-19 annual assessment is as follows:
Covid-19 Annual Assessment ($ Millions)
Year 2023 2024 2025 2026 2027
Assessment $916 $365 $349 $335 $318
2023 assessment is scheduled. 2024-2027 is estimated
and subject to change.
Economic Basis for Projections
Figure 2 shows the summary of the inflows and outflows to the UTF, relevant performance statistics, and cost burden
measures over the projection period. Multiple measures are considered in forming the projections (see Appendix 1 for
details). Key among those are wage and salary growth, unemployment rate, and the size of the civilian labor force.
Charts outlining those estimates are below. For an accessible version of data in the charts below, please see Appendix
2.
• The rate of quarter-to-quarter wage and salary growth is expected to be roughly 1.25% through 2024 before
settling around 1% for the rest of the forecast period. See Figure 3.
• The unemployment rate is also expected to fall during the early part of the forecast, hitting its minimum of 3.05%
during the third quarter of 2023. Afterward, the unemployment rate is expected to rise slowly to just over 3.6% at
the end of the projection period. See Figure 4.
• The civilian labor force is expected to grow slowly but steadily over the projection period, starting from roughly
3.76 million in 2023Q1 and ending at nearly 3.8 million in 2027Q4. Total growth is estimated to be approximately
42,000 from the beginning to end of the projection period. See Figure 5.
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Unemployment Insurance Trust Fund Annual Outlook Report APRIL 2023
Figure 2: Model Projections (2023-2027)
Dollars in thousands
Category 2023 2024 2025 2026 2027
Balance Jan. 1 $3,907,462 $3,469,851 $3,326,519 $3,290,617 $3,162,729
Contributions 2
$1,138,616 $1,354,969 $1,581,625 $1,614,210 $1,641,870
Trust Fund Interest $61,483 $58,592 $57,503 $56,565 $53,993
Other Inflows $0 $0 $0 $0 $0
Inflows Subtotal $1,200,099 $1,413,561 $1,639,128 $1,670,774 $1,695,863
Outlays 3 ($1,637,710) ($1,556,893) ($1,675,030) ($1,798,663) ($1,917,367)
Outflows Subtotal ($1,637,710) ($1,556,893) ($1,675,030) ($1,798,663) ($1,917,367)
Balance Dec. 31 $3,469,851 $3,326,519 $3,290,617 $3,162,729 $2,941,225
Category 2023 2024 2025 2026 2027
Total CY Payroll $245,790,034 $257,533,783 $270,278,219 $281,965,618 $293,632,636
Taxable CY Payroll $46,511,469 $47,049,885 $47,634,179 $48,170,012 $48,704,910
Total CY Contributions as a % of Total CY Payroll 0.46% 0.53% 0.59% 0.57% 0.56%
Total CY Benefits as a % of Total CY Payroll 0.67% 0.60% 0.62% 0.64% 0.65%
Wage Base 15,000 15,000 15,000 15,000 15,000
Schedule* A B C C C
Total Unemp. Rate* 3.12% 3.40% 3.44% 3.59% 3.65%
Average Contribution Rate* 2.37% 2.76% 3.19% 3.22% 3.24%
Solvency Rate* 0.54% 0.70% 0.71% 0.68% 0.70%
T.F. Bal as a % of Total Payroll* 1.41% 1.29% 1.22% 1.12% 1.00%
AHCM* 0.821 0.751 0.708 0.652 0.583
Note: Items marked with asterisk (*) show the value in Q4 rather than an annual sum or average.
2
Does not include Covid-19 Recovery Assessments.
3
Does not include outlays for debt service.
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Unemployment Insurance Trust Fund Annual Outlook Report APRIL 2023
Figure 3: Wage and Salary Growth Rate
2.0%
1.8%
1.6%
1.4%
1.2%
1.0%
0.8%
0.6%
0.4%
0.2%
0.0%
Shaded area denotes projection years
Figure 4: Unemployment Rate
5.0%
4.5%
4.0%
3.5%
3.0%
2.5%
2.0%
1.5%
1.0%
0.5%
0.0%
Shaded area denotes projection years
Figure 5: Civilian Labor Force
3,820
Civilian Labor Force (in
3,800
3,780
Thousands)
3,760
3,740
3,720
3,700
Shaded area denotes projection years
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Unemployment Insurance Trust Fund Annual Outlook Report APRIL 2023
Summary of Projected Inflows
Private, for-profit employers are required under Chapter 151A to contribute to the UI Trust Fund if their business meets
each of the following conditions:
1. They have employees working one or more days in 13 weeks during a calendar year (weeks of employment
need not be consecutive, nor must the employees remain the same); and
2. They pay wages of $1,500 or more in any calendar quarter. Under Chapter 151A, governmental and non-profit
employers may elect to contribute to the private contributory UI system instead of participating as reimbursable
employers.
Employer contributions are based on taxable wages paid to covered employees on a quarterly basis. Wages subject to
contributions are the cumulative total of the first $15,000 paid to each employee in each of the computational rate yea