A plea for a sensible change to EI

The Canadian Labour Congress' Andrew Jackson is worried about EI claimants who might be exhausting their benefits. If the opposition is serious about using EI reform as a cudgel for bashing the government, they would do well to read Andrew's post.

Comments

[Nick Rowe]

On the "weeks before eligible" question, there was evidence of a big spike in the data, suggesting a big moral hazard problem. Do you know if there's a similar spike in the data for the "weeks of benefits" question? In other words, do unemployed workers suddenly find a job at exactly the same time their benefits run out?

If not, that would suggest a smaller moral hazard problem on that margin.

Regardless, it seems to me to be plausible that if you found the optimal point on the trade-off between insurance and moral hazard during normal times, that same optimal point would shift during a recession, when it's harder to find a job? So that if we needed to shift one margin, this might be the margin to shift.

I don't know if this is making sense. Can't explain myself clearly.

[Stephen Gordon]

I think that there is some evidence that there are signs that people time the duration of unemployment spells to coincide with the duration of their benefits. But it does seem to be the margin where we should be working on, I agree.

[Andrew F]

What about benefits that taper off rather than pay in full? That should help with the moral hazard issue.

[Patrick]

I found these two papers interesting (to the extent I can devote time to understanding them)

http://econ-www.mit.edu/files/1274
http://econ-www.mit.edu/files/1275

[westslope]

I read the second paragraph of Andrew Jackson's 'account' of EI and I have to ask, what dimension does Mr. Jackson inhabit?

Why the feel-good BS? Did Mr. Jackson attend Bushite Republican party political boot camp?