Canadian Unemployment Insurance Research Articles

Unemployment in the days of Covid: will the Canadian unemployment insurance program survive the pandemic?

Governed by Austerity, the Canadian unemployment regime stopped delivering a proper wage replacement coverage starting in 1995. Nowadays, the situation is far from showing better results. For the year 2018-2019, only 40% of those who contributed through their wages to the Unemployment Fund were deemed eligible to an unemployment benefits period. Without any surprise, precarious workers had been largely denied such benefits. Those same workers are often active in the service sector, a sector that largely contributes to the GDP increase in Canada. In the Covid context, Canada looked for income replacement answers outside the Unemployment regime and relied on social tax expenditures by creating programmes that showed their flexibility and agility. Those who had to stop working or reduce their working hours - either because they were affected by the virus or had to take care of an affected member of their household - were well served by those programmes. Are social tax expenditures, also called cash transfer programmes, showing the way for the future? Or, can a contributory model like the unemployment regime in Canada adapt to the needs of the workers in the post Covid era?

Employment Insurance: Interregional Redistribution versus Protection against Changing Labour Market Conditions

In this article, I quantitatively investigate the business cycle properties of the Canadian unemployment insurance system, Employment Insurance (EI). EI is designed in such a way that the generosity of benefits depends on regional labour market conditions and thus varies over time with the state of the macro economy as well as geographically depending on local unemployment rates. Simulations of a life-cycle model with heterogeneous agents and search frictions show that the welfare impact of the temporal changes in EI generosity is extremely small. It is dominated by the distributional effects of regional differentiation—that is, regions with persistently high unemployment rates benefit from more generous EI benefits because they are subsidized by regions with low unemployment.

The Canadian Unemployment Insurance Generosity: Reflections From A Comparative Analysis

The unemployment compensation system is at the centre of the current economic and political debate in many Western countries which, under the effects of the increase in public debt, must decide the level of their unemployment insurance while taking into account its impact on the performance of the labour market. In this article, we compare the generosity of such public policy in France and in Canada, while focusing on the experience of central and eastern Europe. By building a composite index, we show that the French unemployment insurance is more generous only in pecuniary terms, and not in its qualitative dimension.

Economic Insecurity and the Weight Gain of Canadian Adults: A Natural Experiment Approach

Using four cycles of longitudinal National Population Health Survey (NPHS) data from 1994 to 2001, we examine whether increasing economic insecurity causes weight gain and obesity. In July 1996, Bill C-12 reduced Canadian unemployment insurance benefits considerably, arguably increasing the economic insecurity of Canadians exposed to unemployment risk. Using a difference-in-difference methodology, this paper compares the change in weight gain of adults 25 to 64 before and after this policy shift. For poorly educated males, the onset of unemployment in the post-policy change era is predicted to increase their body mass index (BMI) by 3.2 points.

On voters’ attitudes towards unemployment insurance subsidies across regions: a Canadian simulation

The Canadian unemployment insurance program is designed to reflect the varying risk of joblessness across regions. Regions that are considered low-risk areas subsidize higher-risk ones. A region’s risk is typically proxied by its relative unemployment rate. We use a dynamic, heterogeneous-agent model calibrated to Canada to analyze voters’ preferences between a uniformly generous unemployment insurance and the current system with asymmetric generosity. We find that Canada’s unusual unemployment insurance system is surprisingly close to what voters would choose in spite of the possibilities of shirking and self-insurance through asset buildup.

The effect of unemployment insurance on weekly hours of work in Canada

Major revisions to the Canadian unemployment insurance program in 1997 created a benefit structure that effectively provides more insurance to workers who are employed for longer workweeks. This anomaly creates an incentive for workers and firms to tailor their weekly work schedules to maximize net program benefits. Analysis of Labour Force Survey data shows that workers and firms responded to these changes by altering weekly hours as expected. This behavioural response demonstrates the sensitivity of hours of work decisions to labour market policies. JEL classification: J65 Les effets de l’assurance‐chômage sur le nombre hebdomadaire d’heures de travail au Canada. Des changements majeurs dans le programme canadien d’assurance‐chômage en 1997 ont mis en place une structure de prestations qui fournissait un support additionnel aux travailleurs qui travaillaient de plus longues heures dans la semaine. Cette anomalie a créé une incitation pour travailleurs et entreprises à ajuster leur cédule hebdomadaire de travail de manière à maximiser les bénéfices nets du programme. L’analyse des données de l’Enquête sur la population active montre que travailleurs et entreprises ont répondu à ces changements en ajustant les heures hebdomadaires de travail comme prévu. Cette réaction montre bien la sensitivité des heures de travail aux politiques du marché du travail.

Canadian unemployment insurance as a Pareto‐optimal policy instrument

Canadian Journal of Economics/Revue canadienne d'économiqueVolume 34, Issue 4 p. 849-858 Canadian unemployment insurance as a Pareto-optimal policy instrument Charles Blackorby, Charles Blackorby Department of Economics, University of British ColumbiaSearch for more papers by this author Charles Blackorby, Charles Blackorby Department of Economics, University of British ColumbiaSearch for more papers by this author First published: 07 January 2003 https://doi.org/10.1111/0008-4085.00102Citations: 1AboutPDF ToolsRequest permissionExport citationAdd to favoritesTrack citation ShareShare Give accessShare full text accessShare full-text accessPlease review our Terms and Conditions of Use and check box below to share full-text version of article.I have read and accept the Wiley Online Library Terms and Conditions of UseShareable LinkUse the link below to share a full-text version of this article with your friends and colleagues. Learn more.Copy URL Citing Literature Volume34, Issue4November 2001Pages 849-858 RelatedInformation

Insurance Claimants Working While on Claim

Abstract: Subject to certain restrictions, the Canadian unemployment insurance (UI) system permits insurance benefit recipients to work and supplement the UI benefits. Although this provision has been in effect for many years, hardly anything is known about the extent to which it is utilized and what impact this has had on claimants’ UI benefit period. The main objective of the provision is to encourage UI claimants to maintain some link with the job market, to facilitate their re-employment. The empirical analysis presented here confirms that the UI benefit period of insurance claimants working while on claim is substantially shorter than that of those who do not work while on claim.

Bayesian Estimation and Smoothing of the Baseline Hazard in Discrete Time Duration Models

This paper proposes a Bayesian approach for estimating and smoothing the baseline hazard in a discrete time hazard model. The hazard model is specified as a multiperiod probit model and estimated using a Gibbs sampler with data augmentation. The baseline hazard specification is smoothed using the smoothness priors introduced by Shiller (1973). The methods proposed in this paper are then used to study the effect of Canadian Unemployment Insurance eligibility rules on employment durations from New Brunswick, Canada.

Supply side hysteresis: the case of the Canadian unemployment insurance system

This paper presents results from a 1971 natural experiment carried out by the Canadian government on the unemployment insurance system. At that time, the generosity of the UI system was increased dramatically. We find some evidence that the propensity to collect UI increases with a first-time exposure to the new UI system. Hence, as more individuals experience unemployment, their lifetime use of the system increases. This supply side hysteresis effect may explain why unemployment has steadily increased over the 1972–1992 period, even though the generosity of unemployment insurance did not.

Fishing Behavior and the Length of the Fishing Season

The basic hypothesis of this paper is that the amount of fishing that a fish harvester undertakes during a year is not determined entirely by circumstances which are exogenous to the fisher, such as weather conditions and resource availability, but is also partially a matter of individual choice. The paper develops a behavioral model of fishing from the perspective that the decision to modify the period of time over which fishing takes place is governed by a comparison of the marginal benefits and costs of doing so. The model is tested econometric ally as an error-components model using a 10% longitudinal sample of recipients of seasonal fishermen's unemployment insurance benefits in Newfoundland over the period 1971-93. The results suggest that the Canadian unemployment insurance program has reduced the length of the fishing season in Newfoundland by about 8-10 weeks.

Canadian and US Unemployment Rates: A Comparison Based on Regional Data

This paper sets out to explain the Canadian-US unemployment rate gap that has persisted since 1982. The gap, which appeared in two stages, has lasted through peaks and troughs in economic activity. We use a panel of five Canadian and nine US regions to search for the causes. The 1971 liberalization of the Canadian unemployment insurance system can explain the first occurrence of the gap, which was veiled by preferable raw material price movements during the 1970s. The further widening of the gap in the '90s is the result of the tougher post 1987 Bank of Canada stance in fighting inflation.

The Economic Effects of Unemployment Insurance in Canada: An Empirical Analysis of UI Disentitlement

This article provides an overview of the Canadian Unemployment Insurance (UI) program, including its evolution, salient features, relative size, and knowledge about its labor market impacts. Understanding of these impacts is limited, and we conclude that an "event-study" approach is a promising way to further this knowledge. We examine the effects of the 1976 UI disentitlement of the elderly on their labor force behavior and find evidence of significant adverse selection effects. Interactions with the public pension system suggest that poverty among the elderly could be best addressed through changes in programs other than UI.

Equity and Efficiency Consequences of Unemployment Insurance Reform in Canada: The Importance of Sensitivity Analyses

This paper conducts an evaluation of the equity and efficiency consequences of proposals for the reform of the Canadian Unemployment Insurance program. The sensitivity of results to the measure of welfare chosen and to the model employed to simulate individual behavioral responses is illustrated. Copyright 1991 by The London School of Economics and Political Science.

Behavioural Response to UI Reform in Constrained and Unconstrained Models of Labour Supply

This paper investigates how taking account of demand-side constraints affects estimated models of labor supply and, hence, predicted behavioral responses to unemployment insurance reform in Canada. Constrained and unconstrained labor-supply equations are estimated for single men and women using microdata from the 1982 Survey of Consumer Finance. Detailed modeling of the impact of the Canadian unemployment insurance program on individual budget constraints enables the simulation of behavioral responses to the unemployment insurance reform proposals of the Forget and Macdonald commissions. Results indicate that in a high-unemployment economy, labor-supply responses will be negligible.

Quantity-Constrained Household Responses to Ui Reform

This paper explores the consequences of adopting a household perspective when evaluating proposals for the reform of the Canadian unemployment insurance system. A model of joint behavior that allows demand-side constraints to limit labor-supply choices is estimated. Quantity constraints faced by one spouse are, thus, important determinants of the other's behavior. Predicted household responses to unemployment insurance reform proposals are negligible and differ from those that would be obtained using a model of unconstrained individual behavior. Copyright 1990 by Royal Economic Society.

State, Class, and Bureaucracy: Canadian Unemployment Insurance and Public Policy

State, Class, and Bureaucracy: Canadian Unemployment Insurance and Public Policy

State, Class, and Bureaucracy. Canadian Unemployment Insurance and Public Policy

In reviewing the history of Canadian UI, Pal shows that while capital and labour had substantial disagreements over policy, their representations to state officials rarely had any decisive impact on policy development. The author suggests that bureaucratic forces, including organizational ideology and inter-agency conflict, provide a much richer basis for understanding UI policy evolution. The actuarial ideology of the Commission explains the conservative dynamic in UI development, while bureaucratic rivalry, which culminated in victory by the Department of Labour, explains the expansionary thrust, particularly the addition of social welfare aspects. In his discussion of federalism Pal shows that intergovernmental bargaining has had a surprising effect: by the mid-1970s representations from the provinces counted for as much as, if not more than, those from employers and employees. Analysis of UI thus favours state-centred explanations over society-centred ones and suggests that we have overestimated the degree to which government simply responds to external pressures in making policy. Autonomous and distinct forces within the state also greatly effect policy evolution.

State, Class, and Bureaucracy: Canadian Unemployment Insurance and Public PolicyLeslie A. Pal Montreal: McGill-Queen's University Press, 1988, pp. vii, 218

State, Class, and Bureaucracy: Canadian Unemployment Insurance and Public PolicyLeslie A. Pal Montreal: McGill-Queen's University Press, 1988, pp. vii, 218

Relative Autonomy Revisited: The Origins of Canadian Unemployment Insurance

AbstractThe concept of “relative autonomy” is now routinely used by Marxist and non-Marxist students of public policy to describe the state's independence from class forces. A rare attempt to use the concept empirically is Carl J. Cuneo's work on Canadian unemployment insurance (UI) in the 1930s. This article argues that Cuneo focusses too narrowly on class struggle, and thus misses important aspects of Canadian UI policy. Relative autonomy must be more broadly conceived in terms of the state's administrative expertise, fiscal capacity, and jurisdictional divisions. It is constituted within, not outside, the state. The article illustrates these internal forces through a re-examination of the evolution of Canadian UI in the 1930s.