Location Lottery: An Evaluation of the Economic Regions of Employment Insurance

Abstract

The eligibility of Employment Insurance (El) is partially determined by the area in which the applicant lives. Based upon address, an individual can receive anywhere from 14- 45 weeks of benefits with different levels of required insurable hours to qualify. The result is that the current regional policy leads to different coverage levels, and can prevent workers who have paid into the system from collecting benefits. Yet despite this, the way in which the district boundaries are determined is unclear, and has been accused of being used for political gain. The majority of analysis on the regional nature of El has focused on which provinces benefit from the status quo, but research into how the districts compare with each other has not been forthcoming. This capstone endeavors to add to debate about how Employment Insurance is administered in Canada. To compare the current 58 El districts to each other, both population and standard deviation of unemployment rate have been compiled. Figures were compiled from the National Household Survey, which is collected from Statistics Canada every five years. This metric allows for more comprehensive analysis than would have been provided through studying the monthly Labour Force Survey. The majority of analysis was conducted across an urban-rural lens to determine if one method of district creation was more likely to capture a single labour market. The main policy argument behind the regional program is that different labour markets should have differed program access. Under the current program, this ideal is being obscured in favour of administrative ease. The status quo more closely resembles an informal redistribution program that benefits some areas at the expense of others. justification for the boundaries is nonexistent in the public sphere beyond platitudes, allowing for the potential for political interference. In order to improve the system, the boundary review process should become more transparent so that it can be evaluated independent of government. Longer term, Service Canada should find a new way of operationalizing the labour market in a way that more closely reflects the economic diversity. If they are unable to devise another framework that is administratively feasible, serious consideration should be given to reforming the qualification requirements for Employment Insurance.