published in: Research in Labor Economics, 2007, 26, 299-336
Administrative data on the universe of employees, firms, and unemployment insurance (UI)
recipients in Canada over an 11 year period are used to examine the operation of UI using
the firm as the unit of analysis. Persistent transfers through UI are present at both industry
and firm levels, and an analysis using firm fixed effect indicates that an important fraction of
variation in them can be attributed to firm effects. Calculations of overall efficiency loss are
very sensitive to the degree to which firm level information is used. A full appreciation of how
UI interacts with the labour market requires recognition of the characteristics and human
resource practices of firms.
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