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This section provides an in-depth analysis of the six major reasons for job separation: layoffs, return to school, injury or illness, quits, dismissals, and pregnancy or parental reasons. LayoffsTable 3 examines COEP survey respondents for the most recent period (2000Q4 -2001Q3) who, according to their ROE form, were laid off.
Table 3 shows that males account for almost two-thirds (64.3 percent) of EI recipients who were laid off. This is due mainly to the higher percentage of males employed in primary, manufacturing and construction industries where many layoffs occur. Table 3 also indicates a quarter (25.1 percent) of EI recipients who were laid off came from rural areas, compared with about one-fifth (19.2 percent) of EI recipients in the case of all reasons for job separation. Also, 23.6 percent of laid-off EI recipients were seasonal workers, while seasonal workers accounted for only 14.8 percent of all EI recipients. There is little difference in EI receipt rates for laid-off males and females. Also, Table 3 shows little difference in EI receipt rates for seasonal and non-seasonal workers who were laid off. Comparing age groups, however, indicates that the EI receipt rate is lower for youths who were laid off than for workers in the prime or older categories who were laid off. The EI receipt rate is also lower for laid-off workers who are single, compared to those who are married. The presence of children appears to have little effect on EI receipt rates in the case of married individuals. However, the EI receipt rate is relatively low in the case of single parents. One possible explanation for this is that a single parent cannot afford to stay out of employment, as EI benefits may not be enough to cover the cost of living and raising a family. The EI receipt rate is higher for workers laid off in the Atlantic Provinces and Quebec than for those laid off in other regions. Table 4 provides the (probit model) estimation results for COEP survey respondents who were laid off. These results show that workers laid off in primary, manufacturing, construction or government industries are all less likely to collect EI than those laid off in service industries. Laid off employees in smaller firms are more likely to collect EI than those laid off in firms of more than 500 employees. Youths are less likely to collect EI than prime age workers, and this is a result that holds true for many of the reasons for job separation examined in this section of the report. Not surprisingly, the longer the consecutive weeks of unemployment, the more likely a person is to collect EI. At the same time, Table 4 shows that seasonal workers are slightly less likely to collect EI than non-seasonal workers. Employees who are laid off temporarily are more likely to collect EI than those who are laid off permanently. This could be because a temporary layoff does not induce a person to search for new employment to the same extent as a permanent lay off. Another interesting result is that employees receiving notice of a layoff are found to be more likely to collect EI than those not receiving notice. It might be expected that the advance notice would enable new job searches to occur earlier than they otherwise would, leading to quicker re-employment. However, given that the type of people receiving notice of a layoff is not random (i.e. long tenured, older workers with families treated differently than newer, younger workers with no families), this apparent paradox is not that surprising. Finally, the results shown in Table 4 indicate that individuals laid off in the most recent period are less likely to collect EI than those laid off during the post-EI reform period, although this analysis provides no information to indicate why this is the case.
Cross tabulation analysis (not shown) indicates that approximately 72 percent of all individuals with a layoff recorded as the reason for job separation on their ROE form also gave layoff as the reason for separation when asked by the COEP interviewer. Return to SchoolIn general, for a person to receive benefits after voluntarily leaving employment, the person must show that leaving was the only reasonable alternative under the circumstances or that there was no reasonable alternative for remedying the situation. The legislation does not ask claimants to do the impossible in establishing just cause for voluntarily leaving a job, but does require what is reasonable under the circumstances. Given these restrictions, a person who has "return to school" listed on their ROE form as the reason for job separation should generally not expect to collect EI. There are situations, however, where such a person may be able to collect EI. For example, the person may receive EI benefits if the number of hours of schooling or courses does not exceed eleven hours per week. In addition, the schooling/study period cannot last longer than one year, the person must continue to be available for work, and an EI officer must approve the arrangement beforehand. Section 25 of the EI Act provides further information on this aspect of EI. Table 5 examines COEP survey respondents for the most recent period who have "return to school" listed as the reason for the job separation on their ROE. Since there are only a few hundred EI recipients in this group, many of the cells analyzed (in Table 5) may have only a handful of individuals. Therefore, many small differences in Table 5 may not be statistically significant in view of the sample sizes. Slightly more than one-third (38.4 percent) of EI recipients in this group are male. Males returning to school have lower EI receipt rates than females returning to school. Almost all EI recipients with return to school as the reason for their job separation are from urban areas (96.8 percent) and have no children (93.5 percent). Many (44.9 percent) are in the 15 to 24 age category. Comparing EI receipt rates for the different age groups indicates that the EI receipt rate is higher for those of prime age than for youths. For example, in the case of those collecting EI within five weeks of job loss, the EI receipt rate for the prime age group is more than four times that of youths. One possible explanation for these results is that young people are more likely to go back to school for full-time instruction of more than eleven hours per week, which would make them ineligible to collect EI. Prime age workers who have "return to school" listed on their ROE form are more likely to take a couple of courses, rather than become full-time students, and still be eligible for EI. All people returning to school and collecting EI are located in the Atlantic region, Ontario or in the Prairies, although this is probably due to the small sample size. Table 5 also shows that EI receipt rates are much higher in the Atlantic Provinces than they are in Ontario or the Prairies.
Table 6 provides estimation results for COEP survey respondents with "return to school" recorded on their ROE form. These results indicate that workers in government industries returning to school are less likely to collect EI than service industry workers returning to school. Youths are less likely than the prime age group to collect EI. Also, seasonal workers are less likely than non-seasonal workers to collect EI. Table 6 shows that there has been a significant drop over the long-run, indicating that a person returning to school in 2000 or 2001 is less likely to collect EI than someone returning to school during the post-EI reform period.
About 65 percent of individuals (not shown) giving "return to school" as the reason for job end in COEP have it listed on their ROE form. This may be indicative of students who take contract or seasonal work during the summer that ends just before their school year starts. This would lead to an under-reporting of students by employers when the ROE form is completed. Injury or IllnessFor most workers, the requirements to receive EI are more stringent if it is for reasons of injury or illness. As a result of Bill C-32, a worker filing for EI sickness benefits needs only 600 insured hours to qualify for EI sickness benefits instead of the 700 insured hours required prior to Bill C-32. The new rules apply to workers who become unable to work because of sickness on or after December 31, 2000. Sickness benefits may be paid for up to 15 weeks to someone who is unable to work because of sickness, injury or quarantine. A person who makes a claim for sickness benefits is required to prove that he or she is unable to work but would otherwise be available for work. A person may not collect EI sickness benefits if they have a health plan from their employer as it may be more generous than EI benefits. Table 7 examines COEP survey respondents for the most recent period with injury or illness as the reason for the job separation on their ROE form. In this group, female EI recipients outnumber male EI recipients by almost two-to-one. Females reporting injury or illness as the reason for their job separation also have a higher EI receipt rate.
Almost 90 percent of EI recipients (not shown) who recorded an injury or illness had been working in either service industries or the manufacturing sector, compared with about 78 percent of EI recipients in the case of all reasons for job separation. Looking at EI receipt rates by industry indicates that workers in service industries leaving their job due to injury or illness have a higher EI receipt rate than those leaving a job in one of the other industries for this reason. Almost all EI recipients leaving a job because of injury or illness are non-seasonal workers (99.2 percent), compared with 85.2 percent of EI recipients in the case of all reasons for job separation. By age group, youths leaving their job due to injury or illness have higher EI receipt rates than prime age or older workers leaving their jobs for this reason. Table 8 provides estimation results for COEP survey respondents leaving their jobs due to injury or illness.
The results shown in Table 8 indicate that workers from the primary, manufacturing and construction sectors are far less likely to collect EI than those from the service industry. The longer the consecutive weeks of unemployment, the less likely a person is to collect EI. Bill C-32, which came into effect as of December 31, 2000, appears to have had no significant effect on EI receipt rates in the most recent period for those leaving their jobs due to illness or injury. Cross tabulation shows that 80 percent of all individuals leaving their job due to injury or illness according to their ROE form also gave injury or illness as the reason for job separation when asked by the COEP interviewer. QuitsJust cause for voluntarily leaving employment is not limited to only the situations currently defined in the Act. Within the terms of the legislation, just cause for voluntarily leaving employment exists where, having regard to all the circumstances, the claimant had no reasonable alternative to leaving a job. There are at least 40 main reasons that may amount to just cause, many of which fall into one of the following categories:
In addition to these justifiable reasons for quitting a job, there is a special provision under Section 51 of the EI Regulations that may allow a claimant to remain eligible for EI benefits if the quit or voluntary departure (retirement) preserves the job of a co-worker during a workforce reduction process that has been approved by HRDC. In order to receive HRDC approval, the workforce reduction process must be initiated by the employer and aim at a permanent reduction in the overall number of employees. In addition, in order for the claimant to qualify for benefits, the voluntary departure must result in the actual preservation of employment of a co-worker and the employer must have documented all of the preceding elements. And, as usual, the claimant must also be capable, available and seeking any suitable work in order to qualify, as must any person claiming regular EI benefits. Table 9 examines COEP survey respondents for the most recent period who have "quit" listed as the reason for the job separation on their ROE. In this group, male EI recipients outnumber females. Also, males who quit have a higher EI receipt rate than females who quit. Youths account for 17.8 percent of EI recipients who quit but only 12.4 percent of EI recipients in the case of all reasons for job separation.
About 43 percent of those on EI after quitting their job are single without children, compared to 27.8 percent of EI recipients in the case of all reasons for job separation. It is not clear at this point why this is the case. Table 9 also shows that EI receipt rates are lower for those who quit if there is another income earner in the household. Workers who are married with children have, by far, the highest EI receipt rates among the different family types. Table 10 provides estimation results for COEP survey respondents having "quit" listed as the reason for job separation on their ROE form. These results indicate that youths who quit a job are less likely to collect EI than prime age males who quit a job. Older males who quit a job are also less likely to collect EI than prime age males who quit a job. Individuals in the Atlantic region and British Columbia who quit a job are more likely to collect EI than individuals in Ontario who quit a job. Employees who quit a job in a firm with 20-99 employees are more likely to collect EI than employees quitting a job in a firm with more than 500 employees. Someone quitting a job due to a new job is less likely to collect EI than someone quitting a job but not due to a new job. As a caution, however, one should note that this component of the estimated results used information from the COEP survey on the reason for the job separation, and less than 71 percent of COEP survey respondents having a quit listed on their ROE form (not shown) also gave quit as the reason for job separation when asked by the COEP interviewer. Table 10 shows that individuals that quit and in receipt of a severance package are more likely to collect EI than those quitting without the benefit of a severance package.2 This is an unusual result, given that a person cannot collect EI until their severance pay terminates. It is possible that the disincentive to immediately search for new employment is much stronger for those receiving severance pay. A full explanation for this result is not provided by this analysis. Table 10 also shows that, the more weeks on the ROE job and the longer the consecutive weeks of unemployment, the more likely a person will collect EI. In addition, a worker who quits a job is more likely to collect EI if there is a dependent in the household. The location of a worker also appears to have an effect on EI receipt rates, as workers who quit a job and reside in a rural area are less likely to collect EI than those quitting a job and residing in an urban area. Again, in the time period since EI reform it appears that a person quitting is less likely to collect EI in 2000 and 2001 than in the post-EI reform period.
It could be argued that some HRC managers may be more willing than others to allow EI benefits to those who quit.3 With this in mind, additional statistical estimations were done to examine the possible extent of HRC manager bias. When considering the results presented in Table 11, one should note that:
Table 11 shows the five areas that are the most and least likely to have workers quit and go on to collect EI, compared with Toronto Centre. According to these results, EI applicants quitting and from the Peel-Halton-Dufferin region in Ontario are the least likely to collect EI in comparison to Toronto Centre. At the other end of this list, EI applicants quitting and from Gander, Newfoundland are the most likely to collect EI in comparison to Toronto Centre. Although these results are significant, it should be remembered that these are only the 10 most extreme cases out of 110. Whether the fact that the rate of EI receipt ranges from 3.9 percent to 14.2 percent for the middle 1004 would be considered high, would be a matter for further research. It is also worth noting, however, that the higher EI receipt rate differences occur in smaller, rural areas whereas the lowest EI receipt rate differences occur in some of Canada's more populated areas. DismissalThe decision to disqualify an applicant from receiving EI benefits if the applicant is dismissed from a job is not an arbitrary one. The fact that a person has been dismissed should not lead to an automatic assumption that the applicant lost their employment by reason of misconduct. A decision to disqualify someone from receiving benefits in such circumstances may be made only if the information in the file supports the finding that the applicant committed actions or omissions whereby the applicant lost their employment because of these actions or omissions. Table 12 examines COEP survey respondents for the most recent period having dismissal as the reason for the job separation on their ROE. Almost half (45.7 percent) of all EI recipients dismissed are from Ontario. This could be due to the low unionization rates in Ontario, which make it easier to be dismissed. If it is easier to be dismissed in Ontario, there could be a larger number of EI applicants in Ontario who were dismissed, leading to more EI recipients in this category. Table 12 also shows that EI receipt rates for dismissed workers are much higher than might be expected and are significantly higher than the EI receipt rates shown in Table 9 for people quitting their jobs. The EI receipt rate for dismissed prime age workers is far higher than that for youths who were dismissed. Almost one-quarter (23.6 percent) of those on EI after being dismissed are single with children, compared with 8.5 percent of EI recipients in the case of all reasons for separation. Dismissed workers who are married without children have the highest EI receipt rate among the different family types. In the case of dismissed workers, the presence of another income earner in the house leads to a lower EI receipt rate. This result is similar to the result noted in the detailed analysis of those who quit. Dismissed employees in the western provinces have lower EI receipt rates than those dismissed in other regions. Finally, individuals reporting a dismissal in the COEP survey have higher EI receipt rates than those with dismissal listed on the ROE form. In this regard, one should note that only 35 percent of COEP survey respondents (not shown) with dismissal listed on their ROE form also gave dismissal as the reason for their job separation when asked by the COEP interviewer. Of all the reasons for job separation, the link is weakest between what is said by employers on the ROE form and on the COEP survey.
Table 13 provides estimation results for COEP survey respondents who, according to their ROE form, were dismissed. Young females who were dismissed are far less likely to collect EI than prime age males who were dismissed. At the same time, prime age and older female workers are far more likely to collect EI than prime age males who were dismissed. Workers in Quebec who were dismissed are far more likely to collect EI than dismissed workers in Ontario. The only other significant estimation result is that workers having dismissal listed on the COEP survey are more likely to collect EI than those not having dismissal listed on the COEP survey.
The possible bias of HRC managers in distributing EI benefits to those who are dismissed is also examined using the approach discussed in the detailed analysis of quits. For example, once again, the analysis assumes that each area has roughly the same EI application rate. The results in Table 14 show that Sept-Iles, Quebec is the area most likely to have dismissed workers collect EI, in comparison to Toronto Centre. Edmonton, Alberta is the area that is least likely to have dismissed workers collect EI, in comparison to Toronto Centre. Again, there is sufficient evidence to indicate that EI applicants in smaller, rural areas are more likely to collect EI for a dismissal than applicants in larger, urban areas. EI receipt rates vary more widely (5.7 percent to 31.4 percent) than they did in the case of quits (3.9 percent to 14.2 percent).
Pregnancy or Parental ReasonsBill C-32, which came into effect as of December 31, 2000, increased the duration of parental benefits from 10 to 35 weeks for biological and adoptive parents while maintaining the 15 week benefit period for maternity. In addition, claimants are now able to claim EI special benefits (i.e. sickness, maternity and parental) with 600 insured hours instead of 700 insured hours. Parents may choose to share the extended 35 weeks of benefits, including situations where a woman is receiving maternity or parental benefits while the partner is receiving parental benefits at the same time. Parental benefits can be spread over time and need not all be taken in consecutive weeks. All parental benefits must be received, however, within 52 weeks of the child's birth or placement in the parents' care for adoption. Table 15 examines COEP survey respondents having pregnancy or parental reasons as the reason for the job separation on their ROE.
Most (90.7 percent) EI recipients having pregnancy or parental reason as their reason for job separation are females, and most (88.1 percent) are in the 25 to 54 age bracket. Looking at family type indicates that most (85.5 percent) EI recipients with pregnancy or parental reasons are in the married with children category. Regional EI receipt rates range from 79.1 percent in the Prairies to 91.8 percent in Ontario. Some of this variation can be attributed to the fact that provincial labour standards legislation vary significantly. Not all provinces guarantee that a job left for a leave following a birth will still be available at the end of the leave period, even if that leave is the length supported by this aspect of EI. For example, until recently, the length of protected leave in Alberta was shorter than the period covered by EI. The EI receipt rate is higher if there is a working spouse. Once again, this illustrates the effect of dependents on whether or not an individual collects EI. Almost 78 percent of the spouses of EI recipients are employed, illustrating how common it is for both parents to be working. The labour force participation rate of females over the age of 25 has increased by roughly 4 percent from October 1995 to September 2001. Over this same time period, the participation rate of males over 25 has declined slightly. Table 16 provides the estimation results for COEP survey respondents having a job separation due to pregnancy or parental reasons according to their ROE form.
Table 16 shows that primary and construction industry employees are more likely to collect EI than service industry workers. As the number of weeks on the ROE job increases, the EI collection rate also increases. The coefficient for the unemployment rate suggests that, as the unemployment rate increases, a person is less likely to collect EI for pregnancy or parental reasons. Also, it appears that Bill C-32 has had no significant effect on EI receipt rates as a function of ROE's, although there was a rise in the claimants receiving maternity benefits. This is due to the increase in ROE's that was designated as maternity. More than 92 percent of COEP survey respondents who have pregnancy or parental listed on the ROE form also gave pregnancy or parental as the reason for their job separation when asked by the COEP interviewer. Of all the reasons for job separation, this is the strongest correspondence between the ROE form and the COEP survey.
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