Firms, industries, and unemployment insurance: an analysis using employer-employee
data from Canada
by Miles Corak and Wen-Hao Chen
Business and Labour Market Analysis Division
Analytical Studies Branch research paper series, No. 260
Context
The exploration of newly available administrative data in a number
of countries has led to a growing realization that a careful study of
the interaction between employer and employee characteristics is needed
to fully understand labour market outcomes.
Objectives
The objective of this paper is to develop this theme by examining the
design of social policy and its interaction with the labour market.
The focus is on the Canadian unemployment insurance (UI) program.
Findings
The findings show that persistent transfers through UI are present
at both industry and firm levels. These cross-subsidies are concentrated
among a small fraction of firms. An analysis using firm fixed effect
indicates that almost 60 percent of explained variation in persistent
cross-subsidies can be attributed to firm effects. Calculations of overall
efficiency loss are very sensitive to the degree to which firm level
information is used. A full appreciation of how social programs like
UI interact with the labour market requires recognition of the characteristics
and human resource practices of firms, and might be more fruitfully
explored by implicit contract models of unemployment.
Data Sources: The Benefits and Overpayments file, T4 information and data from the Longitudinal Employment Analysis Program.
View
the full publication.
You need to use the free Adobe Reader to view PDF documents. To view (open) these files, simply click on the link. To download (save) them, right-click on the link. Note that if you are using Internet Explorer or AOL, PDF documents sometimes do not open properly. See Troubleshooting PDFs. PDF documents may not be accessible by some devices. For more information, visit the Adobe website or contact us for assistance.
