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

Author

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  • Jane Friesen

Abstract

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.

Suggested Citation

  • Jane Friesen, 2002. "The effect of unemployment insurance on weekly hours of work in Canada," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 35(2), pages 363-384, May.
  • Handle: RePEc:wly:canjec:v:35:y:2002:i:2:p:363-384
    DOI: 10.1111/1540-5982.00135
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    Cited by:

    1. Arthur Sweetman & Matthew D. Webb & Casey Warman, 2014. "How Targeted Is Targeted Tax Relief? Evidence From The Unemployment Insurance Youth Hires Program," Working Paper 1298, Economics Department, Queen's University.
    2. Nong Zhu & Cécile Batisse, 2011. "L'effet des politiques sociales sur l'emploi des nouveaux immigrants à Montréal :une analyse longitudinale et conjoncturelle," CERDI Working papers halshs-00554261, HAL.
    3. Nong Zhu & Cecile Batisse, 2014. "L'effet des politiques sociales sur l'emploi des nouveaux immigrants à Montréal," CIRANO Working Papers 2014s-05, CIRANO.

    More about this item

    JEL classification:

    • J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings

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