Directorates
·	Director General's Office
·	Data Development
·	Strategic Evaluations
·	Partnership and Continuous Evaluations
Publications
·	Evaluation Reports
·	Evaluation Briefs
·	Labour Market Development Agreement Series
·	Lessons Learned Series
·	Evaluation Tool Kit Series
·	Evaluation Forum Newsletter
·	From Theory To Practice

The formula for calculating the level of weekly benefits paid to Employment Insurance (EI) recipients was changed as part of the move to an hours-based EI system in January 1997. Under the new system the weekly benefit rate is based on average weekly insured earnings in the Rate Calculation Period (RCP), which is the twenty-six weeks preceding the last day of employment. Average weekly earnings are calculated by dividing total earnings during the RCP by the greater of the number of weeks worked or the minimum divisor. This formula creates a disincentive for individuals to accept weeks of work during the RCP that lower their average weekly earnings and therefore their subsequent benefit levels.

In 1997, HRDC introduced temporary benefit rate adjustment formulas that are intended to undo this disincentive. Phase I of the Small Weeks Adjustment Projects applied to eligible claims filed between May 4, 1997 and November 15, 1998 in a set of high unemployment regions, and Phase II applied to eligible claims filed between August 31, 1997 and November 15, 1998 in the remaining high unemployment regions. Both phases of the Projects allowed claimants to exclude or bundle “small” weeks, during which earnings were less than $150, from the calculation of average weekly earnings, thereby eliminating the disincentive to work small weeks. The start and end dates of both phases were announced in the first week of March 1997.

This report uses administrative data supplied by HRDC to evaluate the Small Weeks Projects. This evaluation has two objectives:

1. to determine the nature and magnitude of any changes in work patterns in response to the program; and
2. to determine how the program affected the incomes of participants.

This report begins in Section 1 with a description of patterns of participation in the Projects over time, and describes the characteristics of program participants. Section 2 explores the incentives created by the program. Econometric estimates of behavioural responses to the Projects are presented in Section 3. Section 4 concludes.