Deck 10: Employment Insurance

Question 1

The Unemployment Insurance Act of 1971 expanded unemployment insurance coverage to 93 percent of the labour force.

A)True
B)False
C)Uncertain

Answer 1

True

Question 2

In 2012, had the highest employment insurance benefits received to employment insurance premiums paid (benefit-to-tax)ratio.

A)Atlantic Canada
B)Ontario
C)Quebec
D)Western Canada

Answer 2

Atlantic Canada

Question 3

The unemployment rate is

A)the percentage of the labour force that is employed.
B)the percentage of the labour force that is unemployed.
C)the percentage of the working-age population that is not in the labour force.
D)the percentage of the working-age population that is unemployed.

Answer 3

the percentage of the labour force that is unemployed.

Question 4

Individuals who do not have a job and are not actively searching for employment are classified as

A)not in the working-age population.
B)in the labour force.
C)not in the labour force.
D)unemployed.

Question 5

Individuals are considered unemployed if they

A)have a job but are off work because of illness.
B)do not have a job and are actively searching for employment.
C)have a part-time job and are actively searching for alternative employment.
D)do not have a job and are not actively searching for employment.

Question 6

The direct effects of employment insurance on labour markets refer to changes in the economic environment that determine employment patterns in the economy.

A)True
B)False
C)Uncertain

Question 7

Unemployment taxes are collected from both employees and employers.

A)True
B)False
C)Uncertain

Question 8

Employment insurance benefits are limited to a maximum on insurable earnings.

A)True
B)False
C)Uncertain

Question 9

Employment insurance is subject to moral hazard because workers and employers can influence the probability and magnitude of a loss.

A)True
B)False
C)Uncertain

Question 10

Layoffs and hiring occur because of fluctuations in aggregate demand over the business cycle.

A)True
B)False
C)Uncertain

Question 11

The separation rate is

A)the number of individuals who quit searching for employment as a percentage of the working-age population.
B)the rate at which individuals are laid off or quit their job.
C)the total number of employed as a percentage of the working-age population.
D)the number of couples living apart relative to the total married population.

Question 12

The minimum number of hours required to be eligible for employment insurance is the same across Canada.

A)True
B)False
C)Uncertain

Question 13

The working-age population is comprised of individuals between the ages of 15 to 64.

A)True
B)False
C)Uncertain

Question 14

The layoff rate is

A)the number of workers permanently or temporarily laid off divided by the number of employed workers.
B)the number of workers permanently laid off divided by the number of employed workers.
C)the number of workers temporarily laid off divided by the number of employed workers.
D)none of these answers is correct.

Question 15

The consensus from the empirical literature is that the employment insurance benefit rate and the duration of benefits have sizeable effects on the duration of unemployment.

A)True
B)False
C)Uncertain

Question 16

A compulsory government insurance program can avoid the adverse selection problem, and it eliminates the moral hazard problem.

A)True
B)False
C)Uncertain

Question 17

Individuals who quit their jobs employment insurance.

A)are eligible for
B)do not need
C)might be eligible for
D)are ineligible for

Question 18

In 2012, the industry had the highest employment insurance benefits received to employment insurance premiums paid (benefit-to-tax)ratio.

A)public administration
B)agriculture, forestry, fishing, and hunting
C)mining and oil and gas extraction
D)utilities

Question 19

In 2014, the province with the lowest unemployment rate was

A)Alberta.
B)Quebec.
C)Saskatchewan.
D)Ontario.

Question 20

Individuals received a total of n employment insurance benefits in 2013-14.

A)$15.4 million
B)$468 million
C)$15.4 trillion
D)$15.4 billion

Question 21

There has been an upward trend in the labour force participation rate since the mid-1960s. What are some possible explanations for this upward trend? Do you think this is likely to continue?

Question 22

The extent to which employment insurance alleviates poverty and redistributes incomes depends on how the benefits are distributed and how the program is financed. Do you think that employment insurance achieves redistribution of incomes?

Question 23

The formula representing the relationship between the unemployment rate, the separation rate and average duration of unemployment is given by:
Assume that the job separation rate is 1 percent and the average duration of unemployment is 12 weeks. Calculate the unemployment rate. Now assume that the average duration has decreased to 10 weeks. Calculate the new unemployment rate. Explain how this relationship can be used to consider how employment insurance affects the unemployment rate.

Question 24

Systemic effects of employment insurance on the labour market include

A)quits.
B)duration of unemployment.
C)layoffs.
D)labour mobility.

Question 25

Since employment insurance premium rates are _ for all workers and firms, the system can be seen as employment in the more volatile sectors of the economy.

A)the same; taxing
B)the same; subsidizing
C)different; taxing
D)different; subsidizing

Question 26

Discuss how the flows between different labour market states influence the unemployment rate. How do these help us understand and determine the causes of unemployment?

Question 27

The maximum length of an employment insurance claim is

A)10 weeks.
B)45 weeks.
C)52 weeks.
D)27 weeks.

Question 28

The employment rate is total employment as a share of the labour force.

A)True
B)False
C)Uncertain

Question 29

George face a 10 percent probability of being unemployed for 6 weeks each year. During that time he collects $3,240 in employment insurance benefits. What is the actuarially fair premium for this employment insurance coverage?

Question 30

Employment insurance premiums have ________ expenditures by a margin since 1994.

A)lagged; substantial
B)exceeded; small
C)lagged; small
D)exceeded; substantial