National Post

Page URL: http://www.nationalpost.com/news.asp?f=990427/2527901

Tuesday, April 27, 1999

Sons of parents who collected UI likely to do same
Statistics Canada of finding: Individuals who use system once likely to repeat use

Eric Beauchesne
Southam News

OTTAWA - Like father like son, or so it would seem when it comes to collecting employment insurance.

Previous parental dependence on unemployment insurance plays a significant role in whether a son will also use UI, now called employment insurance or EI, according to the draft report of a new Statistics Canada study.

The sons of parents who have collected UI are more likely to go on pogie than are the sons of those who never received UI, says the study on the "Intergenerational Influences on the Receipt of Unemployment Insurance."

And while an individual who has used the system once is more likely to use it again than one who hasn't, it is again the previous use of UI by a parent that has the most significant impact on repeat use of UI by the next generation, concludes the study.

The survey was conducted using income tax forms of parents and sons from 1978 to 1997. It was based on a sample survey of one out of every 100 men born between 1963 and 1966.

The study, after controlling for other factors that might explain why children follow in their parents' footsteps, such as the region and industry in which they work, "found that parental use of UI plays an important role in determining the use that their children will make of UI.

"Only about a quarter of men whose fathers used UI in the past will make it to the age of 30 without relying on the program, but a third of their counterparts whose father did not use the program will do so.

"It is the case that a first spell of UI then raises the probability of future spells, but in general subsequent participation in the program is governed to a greater degree by parental background than by individual learning."

About 43% of the sons in the study had fathers who collected UI benefits at some point. While 81% of those relied on UI at some point, only 70% of those whose fathers didn't use UI, did so.

But possibly an even more surprising finding of the study was that "the generosity of the program is never a statistically significant determinant of program use."

The Organization for Economic Co-operation and Development in its jobs study, asserted that the generosity of employment insurance in Canada, and in some other industrial countries, has over the years discouraged the unemployed from seeking work and as such has added to a chronically high jobless rate.

Reforms to the UI system this decade, which the OECD has said do not go far enough, were purportedly aimed at reducing the generosity, and in turn, use of UI.

"The chances of starting a claim, however, are not influenced by the measure of program generosity," the Statistics Canada study concluded. "The measure of UI generosity is not statistically significant.

"It would seem that for the group of young people under study, it is not the generosity of UI that is relevant in determining the chances of participating in the program, but rather the inheritance they get from their family background."

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