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The BU Ratio: Prospect and Retrospect

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  • Timothy C. Sargent

Abstract

This purpose of this paper is to examine the recent fall in the BU ratio — the ratio of EI beneficiaries to the unemployed. To what extent is this fall due to programme changes, and to what extent is it a temporary phenomenon related to the recession of the early 1990s? To answer these questions we construct an aggregate time series model of the relationship between the BU ratio and the labour market, using our previously developed EI Disincentives Index. This model is then used to analyze the path of the BU ratio in recent years and to project its behaviour in the future given certain assumptions about the future path of unemployment. Ce document analyse la baisse du ratio PC — le ratio du nombre de prestataires ordinaires d’assurance-emploi sur le nombre de chômeurs — depuis les années quatre-vingts. Quelle partie de ce déclin est due aux changements dans le programme assurance-emploi, et quelle proportion est due à la récession des années quatre-vingt dix ? Pour répondre à cette question, nous construisons un model économétrique de la relation entre le ratio PC et le marché du travail, en utilisant notre indice des effets dissuasifs du système d'assurance-emploi. Ce modèle est alors utilisé pour analyser le comportement du ratio PC et pour faire une prévision de son comportement dans l’avenir, étant donné certaines hypothèses sur le comportement du taux de chômage.

Suggested Citation

  • Timothy C. Sargent, "undated". "The BU Ratio: Prospect and Retrospect," Working Papers-Department of Finance Canada 1998-09, Department of Finance Canada.
  • Handle: RePEc:fca:wpfnca:1998-09
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    Cited by:

    1. Vroman, Wayne, 2002. "Unemployment insurance and unemployment assistance : a comparison," Social Protection and Labor Policy and Technical Notes 24084, The World Bank.
    2. Stephen Whelan, 2010. "The take-up of means-tested income support," Empirical Economics, Springer, vol. 39(3), pages 847-875, December.

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