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Unemployment Insurance and Unemployment Dynamics

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Author Info
Ross D. Milbourne
Douglas D. Purvis
W. David Scoones

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Abstract

One 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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Publisher Info
Article provided by Canadian Economics Association in its journal Canadian Journal of Economics.

Volume (Year): 24 (1991)
Issue (Month): 4 (November)
Pages: 804-26
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Handle: RePEc:cje:issued:v:24:y:1991:i:4:p:804-26

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  1. Peter Kuhn & A. Leslie Robb, 1998. "Shifting Skill Demand and the Canada-US Unemployment Gap: Evidence from Prime-Age Men," Canadian Public Policy, University of Toronto Press, vol. 24(s1), pages 170-191, February. [Downloadable!] (restricted)
    Other versions:
  2. Michael Baker & Miles Corak & Andrew Heisz, 1998. "The Labour Market Dynamics of Unemployment Rates in Canada and the United States," Canadian Public Policy, University of Toronto Press, vol. 24(s1), pages 72-89, February. [Downloadable!] (restricted)
  3. Hassan Bougrine, 1999. "Unemployment Insurance and Unemployment: an analysis of the aggregate demand-side effects for postwar Canada," International Review of Applied Economics, Taylor and Francis Journals, vol. 13(1), pages 5-21, January. [Downloadable!] (restricted)
  4. Stephen S. Poloz, 1995. "The Causes of Unemployment in Canada: A Review of the Evidence," Macroeconomics 9502002, EconWPA. [Downloadable!]
  5. Robert A. Amano & Tony S. Wirjanto, 1995. "An Empirical Investigation into Government Spending and Private Sector Behaviour," Macroeconomics 9502005, EconWPA. [Downloadable!]
    Other versions:
  6. David Card, 1992. "A Comparative Analysis of Unemployment in Canada and the United States," Working Papers 677, Princeton University, Department of Economics, Industrial Relations Section.. [Downloadable!]
    Other versions:
  7. David Card & Craig Riddell, 1996. "Unemployment in Canada and the United States: A Further Analysis," Working Papers 731, Princeton University, Department of Economics, Industrial Relations Section.. [Downloadable!]
    Other versions:
  8. Guillaume Rocheteau, 1999. "Can an Unemployment Insurance System Generate Multiple Natural Rates?," International Tax and Public Finance, Springer, vol. 6(3), pages 379-387, August. [Downloadable!] (restricted)
  9. Baker, Michael & Corak, Miles & Heisz, Andrew, 1996. "Unemployment in the Stock and Flow," Analytical Studies Branch Research Paper Series 1997097e, Statistics Canada, Analytical Studies Branch. [Downloadable!]
  10. Stephen S. Poloz, . "The Causes of Unemployment in Canada: A Review of the Evidence," Working Papers 94-11, Bank of Canada. [Downloadable!]
  11. Kevin Lang & Jay Zagorsky, 1998. "Why are Canadian and US Unemployment Rates So Highly Correlated?," Canadian Public Policy, University of Toronto Press, vol. 24(s1), pages 56-71, February. [Downloadable!] (restricted)
  12. repec:fth:prinin:352 is not listed on IDEAS
  13. Manfred Keil & Louis Pantuosco, 1998. "Canadian and US Unemployment Rates: A Comparison Based on Regional Data," Canadian Public Policy, University of Toronto Press, vol. 24(s1), pages 38-55, February. [Downloadable!] (restricted)
  14. D. Gross, 1997. "Unemployment Insurance Turnover in Canada," Working Papers 9708, University of Sydney, Department of Economics. [Downloadable!]
  15. Cote, D. & Hostland, D., 1996. "An Econometric Examination of the Trend Unemployment Rate in Canada," Working Papers 96-7, Bank of Canada. [Downloadable!]
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