Unemployment Insurance and Quits in Canada

Abstract

In two recent policy changes, the Canadian government acted to limit the eligibility of job quitters and those dismissed for cause for unemployment insurance (UI). We study the effects of these policy changes on separation behaviour. We find no evidence that these policy changes induced a relabelling of separations towards UI-eligible reasons, but we do find quite different responses across demographic groups. Women and young men are inhibited from quitting their jobs by the new quit penalties, but prime-age males seem unaffected by the large increase in the cost of quitting imposed by the changes.