Recent Changes to the Employment Insurance Regime: Encouraging Work On-claim and Off-claim

This paper evaluates some aspects of the 1996 Employment insurance (EI) reform package. One important modification was the small weeks initiative, which was a pilot program designed to encourage more working activity while qualifying for benefits. Another provision that was monitored closely is the "allowableearnings" regulation, which is designed to encourage claimants to accept short-term work while receiving benefits. I evaluate both of these provisions from an economic policy perspective. It is argued that for many frequent users of EI, the incentives regarding work activity are more complicated than is typically realized. The employment patterns of frequent users of EI are sensitive to changes in benefit calculation formulas, which has repercussions for the expansion of eligibility to more workers with non-standard employment patterns. Within the time horizon of a single EI claim, incentives to accept work have been strengthened, but