The Effect of Unemployment Insurance on Weekly Hours of Work in Canada
Simon Fraser University
Canadian Journal of Economics, Vol. 35, pp. 363-384, 2002
Major revisions to the Canadian unemployment insurance program in 1997 created a benefit structure that effectively provides more insurance to workers who are employed for longer workweeks. This anomaly creates an incentive for workers and firms to tailor their weekly work schedules to maximize net program benefits. Analysis of Labour Force Survey data shows that workers and firms responded to these changes by altering weekly hours as expected. This behavioural response demonstrates the sensitivity of hours of work decisions to labour market policies.
Number of Pages in PDF File: 22
JEL Classification: J65
Date posted: December 22, 2002