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Firms, Industries, and Unemployment Insurance: An Analysis Using Employer-Employee Data

Author

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  • Corak, Miles

    (CUNY Graduate Center)

  • Chen, Wen-Hao

    (OECD)

Abstract

Administrative data on the universe of employees, firms, and unemployment insurance (UI) recipients in Canada over an 11 year period are used to examine the operation of UI using the firm as the unit of analysis. Persistent transfers through UI are present at both industry and firm levels, and an analysis using firm fixed effect indicates that an important fraction of variation in them can be attributed to firm effects. Calculations of overall efficiency loss are very sensitive to the degree to which firm level information is used. A full appreciation of how UI interacts with the labour market requires recognition of the characteristics and human resource practices of firms.

Suggested Citation

  • Corak, Miles & Chen, Wen-Hao, 2003. "Firms, Industries, and Unemployment Insurance: An Analysis Using Employer-Employee Data," IZA Discussion Papers 811, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp811
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    References listed on IDEAS

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    1. Miles Corak, 1993. "Unemployment Insurance Once Again: The Incidence of Repeat Participation in the Canadian UI Program," Canadian Public Policy, University of Toronto Press, vol. 19(2), pages 162-176, June.
    2. John M. Abowd & Francis Kramarz & David N. Margolis, 1999. "High Wage Workers and High Wage Firms," Econometrica, Econometric Society, vol. 67(2), pages 251-334, March.
    3. Miles Corak, 1993. "Is Unemployment Insurance Addictive? Evidence from the Benefit Durations of Repeat Users," ILR Review, Cornell University, ILR School, vol. 47(1), pages 62-72, October.
    4. Lemieux, Thomas & MacLeod, W. Bentley, 2000. "Supply side hysteresis: the case of the Canadian unemployment insurance system," Journal of Public Economics, Elsevier, vol. 78(1-2), pages 139-170, October.
    5. Patricia M. Anderson & Bruce D. Meyer, 1993. "The Unemployment Insurance Payroll Tax and Interindustry and Interfirm Subsidies," NBER Chapters, in: Tax Policy and the Economy, Volume 7, pages 111-144, National Bureau of Economic Research, Inc.
    6. Denis Lawrence, 1989. "An Aggregator Model of Canadian Export Supply and Import Demand Responsiveness," Canadian Journal of Economics, Canadian Economics Association, vol. 22(3), pages 503-521, August.
    7. Baldwin,John R. & Gorecki,Paul With contributions by-Name:Caves,Richard E. With contributions by-Name:Dunne,Tim With contributions by-Name:Haltiwanger,John, 1998. "The Dynamics of Industrial Competition," Cambridge Books, Cambridge University Press, number 9780521633574.
    8. Feldstein, Martin S, 1976. "Temporary Layoffs in the Theory of Unemployment," Journal of Political Economy, University of Chicago Press, vol. 84(5), pages 937-957, October.
    9. Lin, Zhengxi, 1998. "Employment Insurance in Canada: Recent Trends and Policy Changes," Analytical Studies Branch Research Paper Series 1998125e, Statistics Canada, Analytical Studies Branch.
    10. Topel, Robert H, 1983. "On Layoffs and Unemployment Insurance," American Economic Review, American Economic Association, vol. 73(4), pages 541-559, September.
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    Cited by:

    1. Sébastien Breau & David L. Rigby, 2010. "International trade and wage inequality in Canada," Journal of Economic Geography, Oxford University Press, vol. 10(1), pages 55-86, January.
    2. José María Arranz & Carlos García Serrano, 2015. "Los sistemas de prestaciones por desempleo de “experience rating”. Un análisis de los despidos temporales y los subsidios cruzados en España," Hacienda Pública Española / Review of Public Economics, IEF, vol. 212(1), pages 129-168, March.
    3. Colin Busby & David Gray, 2011. "Mending Canada's Employment Insurance Quilt: The Case for Restoring Equity," C.D. Howe Institute Backgrounder, C.D. Howe Institute, issue 144, November.

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    More about this item

    Keywords

    unemployment insurance; payroll taxes;

    JEL classification:

    • J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings
    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies

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