Labour Market Adjustment in Canada and the United States
AbstractThis paper provides a quantitative assessment of the relative importance of different labour market adjustment mechanisms in Canada and the United States. The effects of the unemployment insurance (UI) system on labour market adjustment are also examined. We find that, at the aggregate level, employment growth shocks result in roughly similar unemployment rate responses but smaller wage responses in Canada relative to the United States. Although the UI system has clearly contributed to increased unemployment persistence in Canada, there is little evidence that the endogenous component of the UI system has had a significant effect on aggregate unemployment persistence. We also conclude that the lower degree of aggregate real wage flexibility in Canada has had only a limited effect on unemployment persistence.
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Bibliographic InfoArticle provided by University of Toronto Press in its journal Canadian Public Policy.
Volume (Year): 24 (1998)
Issue (Month): s1 (February)
Contact details of provider:
Postal: University of Toronto Press Journals Division 5201 Dufferin Street Toronto, Ontario, Canada M3H 5T8
Web page: http://economics.ca/cpp/
Other versions of this item:
- Alun H. Thomas & Eswar Prasad, 1997. "Labor Market Adjustment in Canada and the United States," IMF Working Papers 97/2, International Monetary Fund.
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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- Chan G. Huh & Bharat Trehan, 1995.
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Federal Reserve Bank of San Francisco, pages 3-13.
- Chan Guk Huh & Bharat Trehan, 1992. "Modelling the time series behavior of the aggregate wage rate," Working Papers in Applied Economic Theory 92-04, Federal Reserve Bank of San Francisco.
- Katharine G. Abraham & John C. Haltiwanger, 1995. "Real Wages and the Business Cycle," Journal of Economic Literature, American Economic Association, vol. 33(3), pages 1215-1264, September.
- Olivier Jean Blanchard & Lawrence F. Katz, 1992. "Regional Evolutions," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 23(1), pages 1-76.
- Mario Lefebvre, 1997. "Les marchés du travail régionaux : une comparaison entre le Canada et les États-Unis," Working Papers 97-17, Bank of Canada.
- Eswar Prasad & Alun Thomas, 1998. "A disaggregated analysis of employment growth fluctuations in Canada," Atlantic Economic Journal, International Atlantic Economic Society, vol. 26(3), pages 274-287, September.
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