The Effect of Unemployment Insurance Benefits on Income Inequality in the Canadian Provinces

Galen J. Countryman

Canadian Public Policy, 1999, vol. 25, issue 4, 539-556

Abstract: This study provides an analysis of the relative progressivity of the immediate impact of the unemployment insurance (UI) program in Canada from 1975 to 1996 at both the national and provincial level. In addition, the welfare gain from the reduction in income inequality was estimated (given certain normative assumptions) to be between 1 and 2 percent of aggregate income nationally. This estimate can be compared with the efficiency costs from the labour market implications of the program. Given the existing policy debate on the UI program, this should prove to be both an interesting and important component of any future policy discussions concerning the UI systems.

Date: 1999
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