April 2001     Vol. 2, no. 4

Repeat users of employment insurance

Lori M. Stratychuk

The Employment Insurance (EI) program   1  provides various income support benefits to qualifying individuals. In most cases, EI acts like insurance, providing income for those who have unexpectedly become unemployed. Other benefits are also available for maternity, paternity and sickness. In addition, EI provides "active labour market programs" for such things as training, job creation, job sharing, and wage subsidies.

EI covers virtually all employees across the country, most of whom never need to draw upon the program. Among those who do draw benefits, most do so only infrequently. However, a number of individuals, year after year, work for a portion of the year and then collect EI benefits for the rest of the year. This study looks at the characteristics of these individuals (see Data sources and definitions).

The first part of this study compares the demographic characteristics of repeat users of EI with those of employees overall. The second part examines the attitudes of repeat users toward employment and unemployment in general.

Characteristics of repeat users of EI

Who are the repeat users of the EI program? Do they display patterns by sex, age, education, region of residence, or occupation? This section addresses these issues.

Men use EI more than women, and with greater intensity

Among occasional EI claimants, men and women differ only slightly in their use of the program—men make up 52% of employees and 55% of occasional EI users; women, 48% and 45% (Table 1). Overall however, men do comprise a disproportionate share of regular EI claimants (59%). The difference arises from their unbalanced share among repeat users (65%) and persistent users (62%).

Those over 35 more likely to be repeat users of EI

The age distribution of EI claimants is clearly different than that of employees overall (Table 1). Those 15 to 19 constitute 6% of all employees, yet they represent less than half a percent of all claimants. This is unsurprising, since young workers may not have enough labour market experience to make even a single EI claim. On the other hand, all age groups from 35 onward have a disproportionate share of repeat users and persistent users.

Repeat users less likely to have completed high school

An inverse relationship between claims initiated over the five-year period and high school completion is clear (Chart A). Only 49% of persistent EI users had completed high school. The rate increased modestly (to 59%) for repeat EI users. The rate jumped to 73% for occasional users of the EI program, which was still lower than the rate for all employees (78%).

The inverse relationship was not just because of the age distribution of EI claimants—that is, high frequency claimants tended to be older, and older individuals were less likely to have completed high school. The high school completion rate for each age group and EI claim frequency displayed the same pattern (Table 2). The high school completion rate for all employees was always higher than for occasional EI users, which was higher than for repeat EI users, which was higher than for persistent EI users.

Atlantic Canada and Quebec benefit most

The Atlantic provinces had proportionately more EI claimants than employees (Table 3). Atlantic Canada accounted for 16% of all regular benefit claims initiated, which was more than twice their share of employees (7%). Their share of repeat users was more than double their portion of employees and persistent users were almost quadruple. Quebec also had a disproportionate share of EI claims initiated (34%) relative to its share of paid employment (24%).

The disproportionately high EI claim rates in the Atlantic provinces and Quebec, relative to their share of employees, are not unexpected, given their high unemployment rates. However, the connection between high unemployment rates and high EI claim rates exists because of the regional   2  component of the EI program. As the unemployment rate in an EI region increases, the hours required to qualify for EI diminishes and the maximum duration of benefits increases.

Seasonal occupations linked to claim rates...

Given the seasonal nature of certain occupations, individuals in such jobs are more likely to experience a layoff and then apply for EI benefits.   3  The extent to which persons in a particular occupation over-use the EI program can be measured by the ratio of their share of repeat claims to their share of paid employment. If the ratio is one, individuals in the occupation use EI regular benefits no more or less than expected. The more this ratio exceeds one, the more they rely on the EI program.

Employees in fishing and forestry occupations were the most frequent EI users.   4  Their share of regular claims was almost ten times their share of paid employment (Table 4). The construction trades also had a disproportionate share of EI claims, with regular EI claims more than triple their share of paid employment. All the other trades (mining, processing, machining, transportation and materials handling) also had a relatively large share of claims relative to employment. Teachers also had a disproportionate share of EI claims. Although their work, as well as the education required, is quite different from all other occupations with an excessive share of regular EI claims, the seasonal nature of their jobs is quite similar.

...and claim duration

Whether based on the frequency of claims or the duration of benefits, individuals reporting fishing as their main occupation were the most intense users of EI. Their mean claim frequency was 4.1 between 1992 and 1996. The median number of claims was 5 over the same period, indicating that for the majority it was customary to claim EI benefits every year. The median weeks of benefits was 148, hence the majority of those who collected EI in 1996 had spent more time on EI than at work between 1992 and 1996. Individuals in forestry occupations were the second most intense users of EI, with a claim frequency of 3.8 and 95.2 weeks of benefits.

The occupation groups displayed an interesting pattern in the mean and median number of claims initiated and weeks of benefits (see Mean and median). For almost all occupations, the mean was smaller than the median, indicating a skew to the right in the distributions of claims initiated and weeks of benefits. This implies that the majority of EI claimants had more than the average number of claims and more than the average number of weeks of benefits.

Attitudes of repeat EI users

What are the attitudes and opinions of EI claimants? What is the link between the opinions of EI claimants and their claim history? This part of the article looks at these issues.

Most claimants satisfied with their employment...

The vast majority of regular EI claimants were satisfied with their employment situation in 1997 (Chart B).   5  Moreover, satisfaction with the previous year's employment increased with the number of claims. More repeat users than occasional users were satisfied with their employment situation (65% versus 58%), and more persistent users than repeat users were satisfied with their employment situation (71% vs. 65%). One possible explanation is that individuals experiencing one or two claims were not expecting the change in their employment situation. These individuals with a small number of claims were probably more dissatisfied, given their expectations of employment for the year. On the other hand, individuals who had many claims most likely worked in seasonal industries and were more prepared for changes in their employment situation.

...and their income

EI claimants' satisfaction with their income was almost exactly the same as their satisfaction with their employment situation—the majority were satisfied with their previous year's income (Chart C).   6  Again, the proportion satisfied with the previous year's income increased with the number of claims. Just over half (51%) of occasional claimants indicated they were satisfied with the previous year's income, compared with 59% of repeat users and 66% of persistent users. Following the earlier logic, individuals with only one or two claims in the five-year period were likely more surprised by the change in their income, and therefore less satisfied relative to what they expected they would earn for the year.

Claimants willing to change employers...

Claimants showed very low attachment to their employer (Table 5). The vast majority reported they would be willing to accept a job with another employer doing similar work.   7  Over three-quarters (76%) indicated they would be very likely to switch employers, and an additional 16% indicated they would be somewhat likely to switch. This sentiment was held almost equally by occasional EI claimants, repeat users and persistent users of the program.

...and willing to do a different kind of work...

Claimants showed slightly more attachment to their type of work. Only 16% reported they would be unlikely to accept a job with another employer doing a different kind of work, which is approximately double the proportion who indicated they would be unlikely to accept another job with a different employer but doing a similar kind of work (8%). Their conviction is somewhat diminished—although 84% of claimants indicated they would be likely to accept another job with another employer doing a different kind of work, only two-thirds of these individuals said they would be very likely to do so. Once again, this opinion was invariant by claim history.

...but not prepared to change province

In a complete reversal to their willingness to switch employers and type of work, EI claimants showed a strong preference to remain in their province of residence. The majority (56%) said they would be very unlikely to accept a job with another employer doing similar work with similar pay, but in a different province. An additional 20% said they would be somewhat unlikely to do so. As before, the opinion was nearly the same for occasional, repeat and persistent EI users.

Most claimants feel entitled to benefits

Over half (57%) of all claimants felt they were entitled to all of their weeks of benefits, because they "had paid into the program," with the majority indicating strong agreement (Table 6). This attitude was the same, regardless of claim history.

No stigma to EI, say most claimants

A considerable majority of claimants (82%) disagreed with the statement, "If I were collecting EI, I would not want my friends to know about it." A more resounding message comes from the 58% of all claimants who indicated that they strongly disagreed with this statement. There was also a slight trend for individuals to feel less reluctant to admit that they received EI benefits as their claim history increased—55% of occasional users strongly disagreed with the statement, compared with 60% and 61% of repeat and persistent users, respectively.

Dependence on EI is a fact of life

The majority of EI claimants agreed that, given the type of work they do, dependence on EI from time to time was a fact of life. This opinion rose perceptibly with claim history—51% of occasional users, 71% of repeat users and 79% of persistent users of the EI program agreed.

Summary

Certain demographic characteristics are associated with repeat use of EI. Repeat users tend to be men and to have lower educational attainment. Persons over 35 constitute a disproportionate share of repeat users, as do residents of Atlantic Canada and Quebec.

Certain occupations, specifically the trades and those specific to primary industries, use regular EI benefits more than their share of paid employment would suggest. Based on both claim frequency and claim duration, persons in fishing occupations are the most intense users of EI.

The majority of EI claimants were satisfied with their employment and income situation. They expressed a willingness to change employers and type of work. However, they showed strong geographic immobility; the majority felt strongly attached to their current province. Claimants also showed strong feelings of entitlement to their benefits. In addition, very few perceived any social stigma attached to receiving EI benefits, given their expressed lack of reluctance to admit receipt of EI benefits to friends and family.

Finally, the majority felt that given the type of work they do "dependence on EI from time to time is a fact of life." Furthermore, this feeling increased with claim history. The continued dependence on the program was supported by EI administrative records, which showed a strong link between previous claim history and future use of the EI program (see Changes to the EI program since 1997). More than half of those who had an EI claim every year from 1992 to 1996 proceeded to have claims in both 1997 and 1998—further evidence of the perseverance of repeat usage of EI.

Notes

1. Known as the Unemployment Insurance (UI) program prior to July 1996.
2. The regions used for the EI program are usually census metropolitan areas or a combination of rural areas.
3. Occupation is defined by an individual's main employer in 1997, which is the job they may have returned to after an unemployment spell (and their EI claim). It would have been preferable to have the occupation prior to the EI claim, however this was not available. Only 90.4% of individuals reported a main occupation in 1997, so the percentages have been proportionately adjusted to sum to 100%. The other 9.6% of respondents consists of 0.2% of individuals that did not state their occupation and 9.4% who did not have an occupation to report in 1997. The figures for employees have similarly been adjusted to sum to 100%.
4. Most fishermen are covered by separate EI benefits and therefore were not part of the sample in this study. Individuals in fishing occupations receiving regular benefits are non self-employed fishermen.
5. The exact wording for the question on the EI claimants level of satisfaction with their employment situation was, "Now thinking about the past year and keeping in mind that you may have been both employed and unemployed during that time, please tell me if you were satisfied or dissatisfied with your employment situation." The response choices were satisfied, dissatisfied, or neither satisfied nor dissatisfied. Individuals who responded with (dis)satisfied were further probed by asking, "Were you very (dis)satisfied or somewhat (dis)satisfied?" Individuals not answering these questions were excluded from the calculations.
6. The question on satisfaction with income was, "Keeping in mind that your income may have varied over the past year, were you satisfied or dissatisfied in general with your income?"
7. The question was, "Thinking of your current (or last, if the individual was unemployed at the time of the survey) job—suppose you are laid off from this job with a possible recall sometime in the future. In the meantime, another employer in your area offers you a similar job, in terms of work and pay. Would you be likely or unlikely to accept this offer?"

References

• Government of Canada, "Employment Insurance Act." Canada Gazette, Part III, 1996, Chapter 23.
• Human Resources Development Canada. A Guide to Employment Insurance, Ottawa, 1996.
• Tattrie, D. A Financial Incentive to Encourage Employment among Repeat Users of Employment Insurance: The Earnings Supplement Project, Social Research and Demonstration Corporation, May 1999.

Lori M. Stratychuk is with the Household Survey Methods Division. She can be reached at (613) 951-0380 or lori.stratychuk@statcan.gc.ca.

[ Highlights ] [ Main menu | Editor's corner | More news | Contact us | Survey information | Back issues ] [ Statistics Canada home page | In depth | Français ]

© Statistics Canada - Conditions of  use Published: 2001 04 27