A European unemployment benefits scheme: Lessons from Canada. CEPS Working Document No. 2017-02 / January 2017

Wood, Donna E. (2017) A European unemployment benefits scheme: Lessons from Canada. CEPS Working Document No. 2017-02 / January 2017. [Working Paper]

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Abstract

In many federal political systems, responsibility for unemployment has a multi-tiered architecture, with competence for key elements − including unemployment insurance, social assistance, and the public employment service − dispersed across different orders of government. This paper tells the story of the long transformation of unemployment insurance into a federal responsibility in Canada, and seeks to identify lessons from Canada’s experience that might be useful as Europeans consider the potential of an EU-wide unemployment benefits scheme in response to the financial and euro crisis that started in 2008. Most European scholars look to the United States for transferable ideas. I argue that Canada is a more salient comparator, given that it has similar institutional features to the EU, and has successfully managed a pan-Canadian unemployment insurance benefits scheme for over 75 years. Lessons for the EU from Canada include the place of a centrally managed unemployment insurance programme in a monetary union, and insights with respect to stabilisation, labour mobility, redistribution, social solidarity, legitimacy, and institutional moral hazard.

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