Unemployment Compensation and Adjustment Assistance for Displaced Workers: Policy Options for Canada
This paper examines the role of EI in providing support to â€œdisplaced workers,â€ those who permanently lose their jobs because of changing circumstances. Adjusting to change benefits Canadians as a whole. However, some workers suffer much more from job loss than do others. Those who have held their jobs for an extended period experience substantial earnings losses, while those who have been employed for brief periods experience small losses. Like other job losers, long-tenure displaced workers experience earnings losses due to reduced income during unemployment following displacement. However, unlike other job losers, many long-tenure displaced workers become re-employed at significantly lower wages. EI does not take into account these consequences of job loss. Long-tenure displaced workers constitute a small minority of job losers. My analysis indicates that job losers with 5 or more years of job tenure constitute about 5% of unemployment and 15-20% of permanent job losers. The paper makes several policy recommendations. Some address gaps in research and knowledge, while others recommend enhanced EI benefits for those who suffer greatly from job loss. Since most loss from displacement occurs after reemployment, wage insurance seems the most promising approach for insuring against large losses.
|Date of creation:||22 Dec 2011|
|Date of revision:||22 Dec 2011|
|Contact details of provider:|| Web page: http://www.clsrn.econ.ubc.ca/|
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Jones, Stephen R G & Kuhn, Peter, 1995. "Mandatory Notice and Unemployment," Journal of Labor Economics, University of Chicago Press, vol. 13(4), pages 599-622, October.
- Richard Blundell & Monica Costa Dias & Costas Meghir & John Van Reenen, 2004.
"Evaluating the Employment Impact of a Mandatory Job Search Program,"
Journal of the European Economic Association,
MIT Press, vol. 2(4), pages 569-606, 06.
- Blundell, Richard William & Costa Dias, Monica & Meghir, Costas & Van Reenen, John, 2003. "Evaluating the Employment Impact of a Mandatory Job Search Programme," CEPR Discussion Papers 3786, C.E.P.R. Discussion Papers.
- Zhang, Xuelin & Morissette, Rene & Frenette, Marc, 2007.
"Earnings Losses of Displaced Workers: Canadian Evidence from a Large Administrative Database on Firm Closures and Mass Layoffs,"
Analytical Studies Branch Research Paper Series
2007291e, Statistics Canada, Analytical Studies Branch.
- Frenette, Marc & Morissette, RenÃ© & Zhang, Xuelin, 2009. "Earnings Losses of Displaced Workers: Canadian Evidence from a Large Administrative Database on Firm Closures and Mass Layoffs," CLSSRN working papers clsrn_admin-2009-51, Vancouver School of Economics, revised 25 Sep 2009.
- Riddell, W. Craig & Song, Xueda, 2011.
"The impact of education on unemployment incidence and re-employment success: Evidence from the U.S. labour market,"
Elsevier, vol. 18(4), pages 453-463, August.
- Riddell, W. Craig & Song, Xueda, 2011. "The Impact of Education on Unemployment Incidence and Re-employment Success: Evidence from the U.S. Labour Market," CLSSRN working papers clsrn_admin-2011-18, Vancouver School of Economics, revised 27 Jul 2011.
- Riddell, W. Craig & Song, Xueda, 2011. "The Impact of Education on Unemployment Incidence and Re-employment Success: Evidence from the U.S. Labour Market," IZA Discussion Papers 5572, Institute for the Study of Labor (IZA).
- Schirle, Tammy, 2009. "Earnings Losses of Displaced Older Workers: Accounting for the Retirement Option," CLSSRN working papers clsrn_admin-2009-17, Vancouver School of Economics, revised 16 Feb 2009.
- Parent, Daniel, 2000. "Industry-Specific Capital and the Wage Profile: Evidence from the National Longitudinal Survey of Youth and the Panel Study of Income Dynamics," Journal of Labor Economics, University of Chicago Press, vol. 18(2), pages 306-23, April.
- Michael B Coelli, 2009. "Parental Job Loss, Income Shocks and the Education Enrolment of Youth," Department of Economics - Working Papers Series 1060, The University of Melbourne.
- Kerwin Kofi Charles & Melvin Stephens, 2004.
"Job Displacement, Disability, and Divorce,"
Journal of Labor Economics,
University of Chicago Press, vol. 22(2), pages 489-522, April.
- Jane Friesen, 1997. "Mandatory Notice and the Jobless Durations of Displaced Workers," ILR Review, Cornell University, ILR School, vol. 50(4), pages 652-666, July.
- Granet Picot & Zhengxi Lin & Wendy Pyper, 1998. "Permanent Layoffs in Canada: Overview and Longitudinal Analysis," Canadian Journal of Economics, Canadian Economics Association, vol. 31(5), pages 1154-1178, November.
- Eliason, Marcus & Storrie, Donald, 2004.
"Does job loss shorten life?,"
Working Papers in Economics
153, University of Gothenburg, Department of Economics, revised 17 Sep 2007.
- Bloom, H. & Fink, B. & Lui-Gurr, S. & Bancroft, W. & Tattrie, D., 1997. "Implementing the Earnings Supplement Project: A Test of a Re-employment Incentive," Papers r-98-1a, Gouvernement du Canada - Human Resources Development.
- Jason M. Lindo, 2010. "Are Children Really Inferior Goods? Evidence from Displacement-Driven Income Shocks," Journal of Human Resources, University of Wisconsin Press, vol. 45(2).
- Riddell, W. Craig & Song, Xueda, 2009. "The Causal Effects of Education on Adaptability," CLSSRN working papers clsrn_admin-2009-15, Vancouver School of Economics, revised 16 Feb 2009.
- Vivian H. Hamilton & Philip Merrigan & Éric Dufresne, 1997. "Down and out: estimating the relationship between mental health and unemployment," Health Economics, John Wiley & Sons, Ltd., vol. 6(4), pages 397-406.
When requesting a correction, please mention this item's handle: RePEc:ubc:clssrn:clsrn_admin-2011-31. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Vivian Tran)
If references are entirely missing, you can add them using this form.