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The new Employment Insurance (EI) system introduced by the Canadian government includes several innovations on standard unemployment insurance type systems. One of the most significant is a switch from a weeks base for calculating benefit eligibility (i.e., whether an individual can receive benefits at all) and entitlement (i.e., the amount of time an individual can potentially collect benefits once eligible) to an hours-based system. This paper examines the impact of the switch from a weeks-based to an hours-based system. We are concerned with two main questions. First, how did the switch affect eligibility and entitlement? Second, did the change affect outcomes in terms of the duration of jobs measured both in weeks and in total hours, and in terms of hours worked per week?

Our overall conclusion in terms of eligibility and entitlement is that the switch to an hours-based system had almost no impact on eligibility but did increase the number of weeks of benefits workers were entitled to, in general. A shift from a weeks-based to an hours-based system redistributes weeks of entitlement toward long hour, predominantly male, seasonal workers and away from part-year/part-time, predominantly female workers. The average wages for the groups most affected by the shift to EI are above the average wage for seasonal workers as a whole.

Our overall conclusion with respect to impacts on employment spell durations is that the shift to the hours-based system has had noticeable impacts in terms of shortening seasonal employment spells. This is plausible since seasonal workers typically work long hours per week and, as a result, can acquire given levels of EI entitlement in fewer weeks under the new system. However, this effect should be kept in perspective. Non-seasonal employment spells, which make up the great majority of all employment, show no patterns of adaptation to the UI/EI systems or changes with the introduction of the EI system.

Finally, there is virtually no change in the usual hours per week distribution between 1996 and 1997. In particular, the distribution of usual hours per week for seasonal workers in high unemployment regions, the group that appears to react most to UI incentives, does not change. Thus, while there does appear to be some reaction to the new system in terms of duration of jobs measured in weeks, there is no apparent reaction in terms of adjusting hours per week.