Unemployment Insurance and Unemployment Dynamics
AbstractOne of the puzzling features of the recent behavior of the Canadian unemployment rate is its persistence in the presence of a sustained expansion in real national income. Neither deficient aggregate demand nor a once-for-all, supply-side-induced increase in the natural rate provides a convincing explanation of this phenomenon. This paper presents a model that explains how aspects of unemployment insurance in Canada will cause persistence: unemployment will be highly serially correlated even if output is not. The authors document the increased persistence of the unemployment rate since 1977 and show that the model accounts for much of this phenomenon.
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Bibliographic InfoArticle provided by Canadian Economics Association in its journal Canadian Journal of Economics.
Volume (Year): 24 (1991)
Issue (Month): 4 (November)
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Postal: Canadian Economics Association Prof. Steven Ambler, Secretary-Treasurer c/o Olivier Lebert, CEA/CJE/CPP Office C.P. 35006, 1221 Fleury Est Montréal, Québec, Canada H2C 3K4
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- repec:fth:prinin:352 is not listed on IDEAS
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