This paper examines experience rating in unemployment insurance. Part I discuses the main objective of unemployment insurance while Part II defines some important experience rating concepts and describes the different ways that the states experience rate employers. Part III examines four issues associated with experience rating; the size of the interindustry subsidies, the incidence of employer payroll taxes, the effects on employee turnover and current financing problems in unemployment insurance. Part IV examines the degree of experience rating. Included in this discussion are both measurement issues and comments on the optimal degree of experience rating. Finally, a recent analysis of experience rating conducted by the U.S. Department of Labor, Office of Inspector General is reviewed in Part V.