Earnings Supplement Project (ESP) – The Dynamics of Reliance on EI Benefits: Evidence From the SLID

Summary

This working paper examines the work and Employment Insurance (EI) reliance patterns of a cross-section of Canadian workers who had at least one work interruption in the 1993 to 1995 period or the 1996 to 1998 period. The authors analyze the factors that contribute to a worker being an intense relier on EI benefits in the first period and then examine the factors that contribute to a worker being an intense relier again in the following period. This unique approach allows workers who remain in EI dependency over the long-term to be distinguished from those who are transitioning into and out of EI dependency. The findings reveal that the employment opportunities of the region in which the worker lives, the lack of a high school diploma, and the type of job held by the worker are all significant contributors to long-term EI dependency. However, the findings also reveal that the factors commonly identified as key contributors to frequent EI reliance, namely gender and region of residence, do not contribute to a worker being reliant on EI in the long term once the workers’ past reliance is taken into account.

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