PLEASE DO NOT QUOTE OR CIRCULAT WITHOUT AUTHOR’S PERMISSION The Impact of the Employment Insurance Repayment Policy: Non-Experimental Approaches

This research examines the impact of the strengthened repayment provision under the Employment Insurance (EI) system on the probability of receiving EI benefits among eligible laid-off workers. The new provision has introduced an increase in benefit repayment rates and a reduction in the repayment threshold. Prior to EI, claimants whose annual income was more than 1.5 times the maximum insurance earnings were subject to a flat 30 percent of benefit repayment. Under EI, depending on one’s past claim history, claimants whose income exceeds 1.0 or 1.25 times the maximum insurance earnings are required to repay a greater proportion of benefits received at a rate between 30 and 100 percent. Without randomized experiment, this paper adopts various non-experimental approaches, particularly matching, in estimating the policy effect. Using data from the Survey of Changes in Employment (CIE) and the Survey of Labour and Income Dynamics (SLID), the results show that the strengthened repayment policy was responsible for a 6.2 to 9.7 percentage-point decline in EI participation rate among eligible workers.