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It is difficult to measure the level of hardship undergone by individuals during a period of unemployment. Possibly the most useful indicator is the level of consumer spending that the household is able to maintain. Therefore, this monitoring report examines:

• which individuals are more likely to experience a decline in household consumption one year after a job loss; and
• the possible impact of EI reform in attenuating consumption decline.

Data and Methodology

The Canadian Out-of-Employment Panel (COEP) survey provides important information on the consumption patterns of households one year after the job separation that placed the person in the survey. In this paper, consumption refers to the total amount of household spending at the time of the first interview. The analyses of these data use tabulations to begin identifying which individuals are more likely to experience a decrease in consumption, the size of these changes, and the observed changes in consumption patterns in both the pre- and post-EI reform periods. The initial results are then tested for statistical significance using multivariate regression analysis.

Main Findings

Only a small portion, around 12 percent, of those separated from their jobs experienced a decrease in household consumer spending one year after their job separation. For this group, the decrease averaged about 24 percent of monthly household income.

The analysis of who was most likely to experience a statistically significant decrease in consumer spending after a job separation indicated the following:

• Youth (age 15 to 24) and prime age persons (age 25 to 54) were more likely to experience a decrease in consumption than older workers (age 55 and over).
• All family types had significantly different patterns, with single parents living alone experiencing the most prominent decrease.
• Those with less than 13 weeks of unemployment were less likely to decrease consumption while those with more than 52 weeks of unemployment had a significantly greater probability of experiencing a decrease in consumer spending.
• Part-time workers are less likely to decrease their consumption than full-time workers.
• Seasonal workers are less likely to decrease their consumption than non-seasonal workers.
• Those in Atlantic Canada showed a significantly lower probability of having a fall in consumption while those in British Columbia were slightly more likely to decrease their consumption level.
• EI reform did not appear to influence consumption behavior except in the case of single parents, where the extent to which they appear to be more affected by job loss is ameliorated. This could possibly be due to the Family Supplement.