How employment insurance recipients make decision about insolvency?

Wilner Predelus and Samir Amine

Research in Economics, 2020, vol. 74, issue 4, 344-348

Abstract: Beyond the maximum insurable income, the size of the shortfall increases with the worker's income, leaving unemployed workers with little or no room to maintain a decent life while meeting all their other obligations. This situation is even more perilous in an indebted society where the debt per income ratio hovers at around 175%. This paper contributes to the literature by identifying the key socioeconomic and demographic indicators that dictate the insolvency choice (bankruptcy or consumer proposal) of Canadian insolvent employment insurance recipients. Using Canadian data, we show that low employment insurance leads debtors to eat up their asset and incur more debt, which ultimately make bankruptcy more appealing to them than proposal.

Keywords: Insolvency; Bankruptcy; Proposal; Employment insurance; Choice; Canada (search for similar items in EconPapers)
JEL-codes: C32 G33 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:reecon:v:74:y:2020:i:4:p:344-348

DOI: 10.1016/j.rie.2020.10.004

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