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The paper discusses Canada's work-sharing program, which is a special provision of the unemployment insurance program. The time series properties of the national and regional activity levels of this program between 1982 and 1992 are analyzed with the aid of a regression equation. The model estimates the relationship between global work-sharing program activity and the business cycle in search of a countercyclical pattern. Despite evidence of persistence effects in the time series behavior of the participation levels for the conventional UI program, which have been tied to hysteresis effects for unemployment levels, the participation levels of this program appear to behave counter cyclically, as intended. Although there is some anecdotal evidence at the firm level which would suggest instances of repeat usage, persistence effects are not discernible at the macroeconomic level. On the other hand, despite the fact that the program is not to be used in instances of seasonal employment, the model does generate seasonal patterns.
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We investigate the post-layoff configuration of income sources and pathways of prime-age and older laid- off workers exhibiting a high degree of prior attachment. Using a unique Canadian administrative database that links the event of the involuntary layoff with detailed data on income receipt, we track all of their sources of income over an interval spanning five years after layoff. We conduct a multivariate statistical analysis of the incidence of relying on income from several alternative sources, specifically early retirement (both public and private), reemployment, self-employment, or reliance on social insurance benefits (other than pensions). The two most common states for laid-off workers who have not yet reached normal retirement age are early retirement and continued labour market activity. Our findings indicate that the older workers are at the point of layoff, the greater the likelihood is that they will rely on pension income as their primary income source. This incidence of reliance on pension income also increases with the number of years elapsed since the point of layoff.
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This paper examines the variability of workers' earnings in Canada over the period 1982-1997. Using a large panel of tax file data, we decompose total variation in earnings across workers and time into a long-run inequality component between workers and an average earnings instability component over time for workers. We find an increase in earnings variability between 1982-89 and 1990-97 that is largely confined to men and largely driven by widening long-run earnings inequality. Second, the pattern of unemployment rate and GDP growth rate effects on these variance components is not consistent with conventional explanations and is suggestive of an alternative paradigm of how economic growth over this period widens long-run earnings inequality. Third, when unemployment rate and GDP growth rate effects are considered jointly, macroeconomic improvement is found to reduce the overall variability of earnings as the reduction in earnings instability outweighs the widening of long-run earnings inequality.
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