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Project Description

The Earnings Supplement Project (ESP) is a multi-site demonstration program that is testing an innovative financial incentive designed to stimulate re-employment. ESP provides a re-employment earnings supplement for selected applicants if they leave the unemployment insurance (UI) program quickly for a full-time job, and the new job pays less than the one they had before applying to UI. In general, the supplement is calculated to make up three-quarters of the difference between earnings in a new job and earnings in the job that was lost. For this project, supplements are being offered to two subgroups of UI claimants- those displaced from long-term employment and those with a history of repeat UI use. To encourage a rapid return to work, eligibility is conditional on leaving UI within a specified time period. The goal for the displaced workers is to shorten their often long and painful re-employment process. The goal for repeat UI users is to stimulate "off-season" employment and promote a shift toward year-round jobs.

Project duration: Mar 1995 - Nov 1998

Sites studied include 9 Canada Employment Centers (CECs) located in seven provinces.
Findings for displaced workers will be based of ESP demonstrations run at CECs in:
Granby, Quebec
Oshawa, Ontario
Toronto, Ontario
Winnipeg, Manitoba
Saskatoon, Saskatchewan

Findings for repeat UI users will be based on ESP demonstration programs run at CECs in:
St. Johns, Newfoundland
Halifax, Nova Scotia
Moncton, New Brunswick
Levis, Quebec

Sample Characteristics and Sites Studied

8,144 displaced workers and 3,414 repeat UI users.
4,063 displaced workers and 1,707 repeat UI users were assigned to the treatment group.
4,081 displaced workers and 1,707 repeat UI users were assigned to the control group.

NOTE: UI applicants were checked for eligibility (differing on whether they were at a displaced worker site or a repeat UI users site) by CEC staff, and eligible applicants were asked to participate in the study. They were then randomly assigned by computer to either the supplement group or the standard group.

Recent Findings in Brief

03/31/04: Canada's Earning Supplement Project (ESP) Evaluation: Understanding Employment Insurance Claim Patterns: Final Report of the Earnings Supplement Project

Final Descriptive/Analytical Findings:

• Those who claim EI the most also know how to benefit the most from its rules.
• Employers may play a role in their employees' EI claim patterns.
• EI claim patterns should be examined in the context of household decisions.
• EI does not appear to be a consistent influence on individuals' decisions to move between and within provinces.
• Seasonal workers are not by definition frequent claimants of EI.
• A minority of frequent claimants remain frequent claimants over time.

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