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Getting Off the Rollercoaster: A Stable Funding Framework for the EI Program - EI Reform Part I

Author

Listed:
  • Colin Busby

    (C.D. Howe Institute)

  • Alexandre Laurin

    (C.D. Howe Institute)

Abstract

While the public debate over reforms to Employment Insurance centres on regional fairness in eligibility requirements, it is critical that the EI program remain affordable in good times and bad. To avoid pro-cyclical EI premium decreases during booms and harmful premium increases during downturns, the challenge is to create a rate-setting mechanism that would balance the books over the ebbs and flows of economic cycles, and permit yearly EI account balances to vary. Ottawa also needs to introduce reforms that insulate the EI fund’s management from political interference – and protect that fund from governments that would dip into EI surpluses for general spending. One model is the Canada Pension Plan Investment Board.

Suggested Citation

  • Colin Busby & Alexandre Laurin, 2009. "Getting Off the Rollercoaster: A Stable Funding Framework for the EI Program - EI Reform Part I," e-briefs 81, C.D. Howe Institute.
    • Handle: RePEc:cdh:ebrief:81
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    File URL: https://www.cdhowe.org/getting-rollercoaster-stable-funding-framework-ei-program
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    References listed on IDEAS

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    1. Timothy C. Sargent, "undated". "The BU Ratio: Prospect and Retrospect," Working Papers-Department of Finance Canada 1998-09, Department of Finance Canada.
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    More about this item

    Keywords

    employment insurance reform;

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings
    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy

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