Aside from Constitutional Issues, Few Policies Are More Uniquely Canadian

Aside from constitutional issues, few policies are more uniquely Canadian than the unemployment insurance program, now named the Employment Insurance program. This wide-reaching program has profound effects in many of Canada's labour markets. As the textbook indicates, there have been numerous commissions over the years that have recommended reform, most of which have not been implemented. Your mission here is to summarize the extensive literature, both theoretical and empirical, concerning the role that unemployment insurance plays in labour markets.
• What are the primary economic effects of Canada's UI program on the job search activity of unemployed Canadians? Although you should resort to the job search approach as your analytical
framework, keep your analysis to an intuitive, non-technical, non-graphical level.
• What are the primary economic effects of the UI program on firm behaviour, particularly on layo decisions? You should resort to the implicit contract approach as your analytical framework.
• What are the effects on the labour supply behaviour of those who are not currently eligible, especially those with low labour force attachment?
• What is the overall effect of the UI program on labour force participation and unemployment? Is positive or negative, and why?