This Alert examines the long-term effects of benefit changes in Unemployment Insurance programs on the labour market. It specifically looks at changes in the generosity of UI benefits on unemployment rates and UI claims in New Brunswick and Maine, two relatively homogeneous jurisdictions, over a 50-year period from 1940 to 1990.

New Brunswick and Maine are very similar regions. Both are located in the far eastern regions of the respective countries. The structure and nature of the regional economies are quite similar: both maintain a large resource sector. Both jurisdictions have also experienced slower population growth than the national average for a prolonged period of time and both have average incomes below the national averages.