Impact of EI Pilot Project 15 which extended EI entitlements by 5 weeks. NBIRDT looked at the impact of 1) all 58 regions receiving the extra 5 weeks, 2) 21 high unemployment regions receiving extra 5 weeks, and 3) no regions receiving extra entitlement.
Anomaly detection and data imputation within time series
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Impacts of Employment Insurance Pilots to extend benefit entitlements
1. Impacts of EI Pilots to extend
benefit entitlements
Phil Leonard, UNB Economics & NB-IRDT
Coauthor: David Gray, University of Ottawa
NB-IRDT KT Workshop
September 10, 2019
2. Introduction â Big Picture Context
âą Some would argue that EI has not kept pace with changing
nature of work
âą Growth of short-term contracts, âprecariousâ employment
âą Lower percentage of unemployed eligible for EI (for many reasons)
âą Employment Insurance hasnât seen a major overhaul since
1996 EI Act
âą However, lots of tinkering
âą Many Pilot Projects â most of which extend EI benefit entitlement by 5
weeks in specified regions â today, we focus on Pilot Project 15
3. Our focus
âą Document the many Pilot Projects and subtle changes to rules
âą Focus on those Pilots that extent benefit duration (usually by 5 weeks)
âą Usually in high unemployment regions targeting seasonal workers
âą Have become common policy response to political pressure for more generous EI
âą Focus on Pilot 15 in three time periods
âą Economic Action Plan (Sept. 11, 2009 to Sept 11, 2010) â all 58 EI regions
receive extra 5 weeks entitlement
âą Pilot 15 (Sept 12, 2010 to September 15, 2012) â 21 high unemployment
regions receive extra 5 weeks
âą Post period (Sept. 16-2012 to Oct. 11, 2014) â No regions receive extra
entitlement
âą What is impact of these programs on duration of unemployment?
4. Methods
âą Data: EI Status Vector
âą Week-by-week EI claims records
âą Benefit: Massive number of observations with detailed claim histories
âą Challenge: No information on unemployment duration, only claim
duration
âą Difference-in-Difference Methodology
âą compares treated EI regions before, during and after Pilot to non-
treated regions during same time period
5. Table 1 â Pilot 15 Descriptive Statistics
Pilot Regions All-Non-Pilot Regions
A B C D E F
Before
During
Pilot
After Before
During
Pilot
After
Total Weeks on Claim
40.5 39.2 37.6 35.9 30.8 30.7
Number of Weeks of Benefit Paid
24.7 23.9 22.7 22.5 18.4 18.0
Entitlement Weeks
41.7 38.6 35.0 41.6 31.1 30.6
Exhausted Entitlement
0.224 0.244 0.312 0.224 0.299 0.299
Exhausted 52 weeks
0.338 0.342 0.290 0.205 0.161 0.166
Within 2 weeks of exhausting
entitlement
0.052 0.050 0.053 0.040 0.038 0.040
N
513,790 982,850 969,960 1,089,615 2,147,590 2,072,560
6. Table 2 â Pilot 15 Difference-in-Difference Regression Results
Before & After Before only After Only
Total Weeks on Claim 2.3129*** 3.7714*** 1.6548***
Number of Benefit Weeks 1.6030*** 3.2296*** 0.8237***
Weeks of Entitlement 4.4657*** 7.1114*** 3.160***
Exhausted Benefit Entitlement -0.0634*** -0.0547*** -0.0691***
Exhausted at 52 weeks 0.0536*** 0.0489*** 0.0586***
Within 2 Weeks of Benefit Exhaustion -0.0013 -0.0003 -0.0017
N 7,759,430 4,733,840 6,172,955
7. Results Summary
âą Additional five weeks had expected effects on benefit duration
âą 2-3 additional weeks on claim and 1-3 additional weeks paid
âą Less likely to exhaust entitlement weeks but more likely to reach 52
week maximum
âą No impact on âstrategic behaviourâ as measured by leaving claim just
before exhaustion
8. Next steps
âą Similar analysis for Pilot Project targeting 2016 commodities
downturn
âą Slightly different in that it targeted 15 regions that had an increase in
their unemployment rate, rather than high overall level
âą Targeting cyclical unemployment rather than seasonal
âą Same additional 5 weeks
9. Discussion
âą Basic EI rules provide for longer benefits when regionâs
unemployment rate increases (i.e. countercyclical)
âą Pilot projects amplify this if done during economic downturns, but may
be used to alleviate political pressure especially for seasonal (not
cyclical) unemployment
âą Big picture: EI known to cause substantial cross-industry
subsidization from more efficient to less efficient industries
âą May lead to labour hoarding issue (e.g. in seasonal industries)
âą Issue may be increased with regular pilot projects in the same regions
(to seasonal industries)