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Employment Insurance in Canada: Recent Trends and Policy Changes

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  • Lin, Zhengxi
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    Abstract

    This paper highlights recent trends in employment insurance (formerly unemployment insurance). It also provides a review of the historic evolution of the employment insurance program. The following summarizes the main results. The EI system has turned from large deficits prior to 1993, to nearly balancing the books in that year, and further to substantial surpluses ever since. This is attributable to many factors. Premium contributions collected from employees and employers have been stable at a historically high level since 1994 largely thanks to the recovery of the economy. On the other hand, benefit payouts have steadily declined since 1993 mainly due to a falling number of beneficiaries since 1993, benefit rate reduction from 60% to 57% in 1993 and further to 55% in 1994 except for low income claimants with dependents (back up 60%). The declining number of beneficiaries is in turn attributable to many factors. Unemployment as well as the unemployment rate has been falling since 1993 (there was a slight increase in 1996). Characteristics of the unemployed may have changed. There has also been a series of significant changes in policy parameters regarding benefit eligibility since 1990. Over the course of its nearly sixty years of existence, the EI system has undergone numerous changes. Most significantly, the 1971 UI Act which widely liberalized the pre-1971 system; a series of subsequent fine-tuning and tightening-up; and the abolishment of minimum hours/earnings coverage requirements (all employees are now covered), as well as the name change to "employment insurance" from "unemployment insurance".

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    File URL: http://www5.statcan.gc.ca/olc-cel/olc.action?ObjId=11F0019M1998125&ObjType=46&lang=en&limit=0
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    Bibliographic Info

    Paper provided by Statistics Canada, Analytical Studies Branch in its series Analytical Studies Branch Research Paper Series with number 1998125e.

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    Date of creation: 23 Sep 1998
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    Handle: RePEc:stc:stcp3e:1998125e

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    Web page: http://www.statcan.gc.ca
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    Related research

    Keywords: Employment insurance; social assistance and other transfers; Labour;

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    Cited by:
    1. Daniel Béland & John Myles, 2008. "Policy Change in the Canadian Welfare State: Comparing the Canada Pension Plan and Unemployment Insurance," Social and Economic Dimensions of an Aging Population Research Papers 235, McMaster University.
    2. Miquel Faig, 2008. "Labor Market Cycles and Unemployment Insurance Eligibility," 2008 Meeting Papers 183, Society for Economic Dynamics.
    3. Chen, Wen-Hao & Corak, Miles, 2005. "Entreprises, industries et assurance-chomage : une analyse des donnees sur les employeurs et les employes recueillies au Canada," Direction des etudes analytiques : documents de recherche 2005260f, Statistics Canada, Direction des etudes analytiques.
    4. Jeremy Lise & Shannon Seitz & Jeffrey Smith, 2003. "Equilibrium Policy Experiments and the Evaluation of Social Programs," Working Papers 1012, Queen's University, Department of Economics.
    5. Kathleen M. Day & Stanley L. Winer, 2005. "Policy-induced Internal Migration: An Empirical Investigation of the Canadian Case," CESifo Working Paper Series 1605, CESifo Group Munich.
    6. Corak, Miles & Chen, Wen-Hao, 2003. "Firms, Industries, and Unemployment Insurance: An Analysis Using Employer-Employee Data," IZA Discussion Papers 811, Institute for the Study of Labor (IZA).
    7. Vroman, Wayne, 2002. "Unemployment insurance and unemployment assistance : a comparison," Social Protection Discussion Papers 24084, The World Bank.
    8. Chen, Wen-Hao & Corak, Miles, 2005. "Firms, Industries, and Unemployment Insurance: An Analysis Using Employer-employee Data from Canada," Analytical Studies Branch Research Paper Series 2005260e, Statistics Canada, Analytical Studies Branch.
    9. Lise, Jeremy & Seitz, Shannon & Smith, Jeffrey A., 2005. "Evaluating Search and Matching Models Using Experimental Data," IZA Discussion Papers 1717, Institute for the Study of Labor (IZA).
    10. Garnett Picot & René Morissette & John Myles, 2003. "Low-Income Intensity During the 1990s: The Role of Economic Growth, Employment Earnings and Social Transfers," Canadian Public Policy, University of Toronto Press, vol. 29(s1), pages 15-40, January.
    11. Picot, Garnett & Morissette, Rene & Myles, John, 2003. "Low-income Intensity During the 1990s: The Role of Economic Growth, Employment Earnings and Social Transfers," Analytical Studies Branch Research Paper Series 2003172e, Statistics Canada, Analytical Studies Branch.

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