Following the money is a timeworn method for arriving at the truth. Oakland University professor of economics Kevin Murphy’s research suggests that employers need to think about just that when dealing with the Unemployment Insurance tax.

Since that tax varies state by state – as opposed to the Social Security tax – Murphy’s theory, in a paper under consideration by the prestigious European journal Labour Economics, is that mobile workers will tend to drift away from states with higher taxes.

“What I’m interested in is tax incidence. That’s who really pays the tax,” said Murphy. Studies show that Social Security taxes, while nominally paid half by the employer and half by the worker, are really passed on entirely to the worker, Murphy said.

But if an employer tries to do that with the Unemployment Insurance tax, he may lose his best workers. Using data from the Bureau of Labor Statistics, Murphy divided the workforce into three groups – prime-aged men, prime-aged women and young workers, 16 to 24. He found that prime-aged men are by far the most mobile.

“The employer is going to have a hard time passing that tax increase on to them because they will head south or head west,” he said. “As for workers who are not very mobile, employers should be able to pass that tax cost on.”