Firms currently have incentives to temporarily lay off workers because firms typically are charged for ______ of workers' employment-insurance benefits.

Question

Quizplus · Accepted Answer

Currently, firms in Canada are charged for only a part of workers' employment-insurance benefits, specifically the portion that relates to their own contribution to the program. This creates an incentive for firms to temporarily lay off workers and have them receive benefits through the employment insurance program instead of keeping them on payroll during slowdowns or downturns in business.

Firms Currently Have Incentives to Temporarily Lay Off Workers Because