30 Jan 2017

A European Unemployment Benefits Scheme: Lessons from Canada

Donna E. Wood

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In many federal political systems, responsibility for unemployment has a multi-tiered architecture, with competence for key elements such as unemployment insurance, social assistance, and the public employment service, dispersed across different orders of government.

This CEPS Working Document 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 help Europeans consider the potential of an EU-wide unemployment benefits scheme. Most European scholars look to the United States for transferable ideas; this author argues 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.

Donna E. Wood is an Adjunct Assistant Professor in the Department of Political Science at the University of Victoria, British Columbia, Canada.