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Evaluation of the Impact of the Increase in EI Allowable Earnings Pilot Project on Working While on Claim and Job Search Behaviour in Canada

Author

Listed:
  • Stéphanie Lluis

    (Department of Economics, University of Waterloo)

  • Brian P. McCall

    (Professor of Economics and Professor of Education, University of Michigan)

Abstract
This paper examines the impact of the change in allowable earnings proposed in a pilot project (WWOC) of the Canadian Employment Insurance system implemented in December 2005 in some Canadian regions on working while on claim behaviour and on job search behaviour. The WWOC pilot is expected to increase the subsidy to low earnings/part-time work. Search theory would predict that, all else equal, individuals would increase their intensity of search for these types of jobs. We find evidence that the WWOC pilot substantially increased the incidence and duration of work while on claim receiving full benefits and reduced the incidence and duration of working while on claim receiving no benefits for both men and women. We also find differences in the impact of the WWOC pilot on the job search behaviour of men. These results suggest that the WWOC pilot significantly encouraged working while on claim in low-paying jobs allowing receipt of full benefits. The WWOC pilot significantly reduced the number of hours looking for a job and reduced the likelihood of looking for only a full-time job (relative to looking for only a part-time job or either). These results are robust to the various robustness check analyses performed.

Suggested Citation

  • Stéphanie Lluis & Brian P. McCall, 2011. "Evaluation of the Impact of the Increase in EI Allowable Earnings Pilot Project on Working While on Claim and Job Search Behaviour in Canada," Working Papers 1106, University of Waterloo, Department of Economics, revised Dec 2011.
    • Handle: RePEc:wat:wpaper:1106
    as

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    References listed on IDEAS

    as
    1. McCall, Brian P, 1996. "Unemployment Insurance Rules, Joblessness, and Part-Time Work," Econometrica, Econometric Society, vol. 64(3), pages 647-682, May.
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    4. Paul Storer & Marc A. Van Audenrode, 1995. "Unemployment Insurance Take-Up Rates in Canada: Facts, Determinants, and Implications," Canadian Journal of Economics, Canadian Economics Association, vol. 28(4a), pages 822-835, November.
    5. Krueger, Alan B. & Meyer, Bruce D., 2002. "Labor supply effects of social insurance," Handbook of Public Economics, in: A. J. Auerbach & M. Feldstein (ed.), Handbook of Public Economics, edition 1, volume 4, chapter 33, pages 2327-2392, Elsevier.
    6. Moffitt, Robert, 1985. "Unemployment insurance and the distribution of unemployment spells," Journal of Econometrics, Elsevier, vol. 28(1), pages 85-101, April.
    7. McCall, Brian P, 1997. "The Determinants of Full-Time versus Part-Time Reemployment Following Job Displacement," Journal of Labor Economics, University of Chicago Press, vol. 15(4), pages 714-734, October.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    JEL classification:

    • J08 - Labor and Demographic Economics - - General - - - Labor Economics Policies
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings

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