In particular, bottom quintiles appear to lose considerably more than the middle and upper quintiles when the UI system becomes less generous. Income inequality increases if the minimum weeks required to qualify for UI are increased by 5 weeks in each UI region. The Gini index for men would increase from 0.448 to 0.459 using before-tax income, while the Gini index for households would increase from 0.474 to 0.481. While the shares of the top decile and the top quintile increase, the share of the bottom decile decreases for men, women and households. This result implies that such in income inequality because those who affected can suffer very large income losses if they lose all UI benefits.
All claimants continue to receive their benefits, but at a somewhat lower rate.
In this case, many people are affected but the change for any one individual is not so large as from the disentitlement effects discussed above. The Gini rises from 0.448 to 0.451 for men, and from 0.474 to 0.476 for households. Again the share of the top decile and the top quintile slight increase while the bottom quintile slightly decreases for these groups. Increasing the insurable earnings ceiling to 150 percent of average weekly earnings reduces income inequality. Reducing maximum benefit weeks from 50 to 40 does not generate noticeable impacts on income inequality among Canadian men, women and households.