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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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This chapter introduces readers to the income benefit components of Canada’s Employment Insurance (EI) program. It traces the evolution from Unemployment Insurance in 1971 to EI in 1997 to its state as of 2024. It cites some of the more recent proposals for reforming the program but argues that significant reform seems a distant prospect. This chapter focuses on three key policy concerns: the declining rate of coverage over time, the persistently high incidence of frequent use, and the impact of the rules and provisions on shaping hiring and job separation decisions. The administrative superstructure remains an unwieldy, inflexible circumscription for two distinct programs that are appended together. One is loosely based on insurance principles that serve the majority of claimants without part-year employment. The other constitutes an income maintenance scheme serving the minority with seasonal employment patterns, which the government has targeted with extraordinary coverage since 1971 and mostly protected from cutbacks. Decoupling these two components, as recommended by two royal commissions in the mid-1980s, would facilitate a less costly, more efficient, and more modern EI system that could better accommodate the evolving labor market structure going forward. It would be extremely problematic to extend coverage to “gig” workers.
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