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Canadian and US Unemployment Rates: A Comparison Based on Regional Data

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  • Manfred Keil
  • Louis Pantuosco
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    Abstract

    This paper sets out to explain the Canadian-US unemployment rate gap that has persisted since 1982. The gap, which appeared in two stages, has lasted through peaks and troughs in economic activity. We use a panel of five Canadian and nine US regions to search for the causes. The 1971 liberalization of the Canadian unemployment insurance system can explain the first occurrence of the gap, which was veiled by preferable raw material price movements during the 1970s. The further widening of the gap in the '90s is the result of the tougher post 1987 Bank of Canada stance in fighting inflation.

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    Bibliographic Info

    Article provided by University of Toronto Press in its journal Canadian Public Policy.

    Volume (Year): 24 (1998)
    Issue (Month): s1 (February)
    Pages: 38-55

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    Handle: RePEc:cpp:issued:v:24:y:1998:i:s1:p:38-55

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    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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    1. 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.
    2. Ross D. Milbourne & Douglas D. Purvis & W. David Scoones, 1991. "Unemployment Insurance and Unemployment Dynamics," Canadian Journal of Economics, Canadian Economics Association, vol. 24(4), pages 804-26, November.
    3. Bean, C. & Symons, J., 1990. "Ten Years Of Mrs T.," Papers 370, London School of Economics - Centre for Labour Economics.
      • Charles Bean & James Symons, 1989. "Ten Years of Mrs. T," NBER Chapters, in: NBER Macroeconomics Annual 1989, Volume 4, pages 13-72 National Bureau of Economic Research, Inc.
    4. Fortin, Pierre, 1984. "Unemployment insurance meets the classical labor supply model," Economics Letters, Elsevier, vol. 14(2-3), pages 275-281.
    5. 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..
    6. Miles Corak, 1993. "Unemployment Insurance Once Again: The Incidence of Repeat Participation in the Canadian UI Program," Canadian Public Policy, University of Toronto Press, vol. 19(2), pages 162-176, June.
    7. John McCallum, 1987. "Unemployment in Canada and the United States," Canadian Journal of Economics, Canadian Economics Association, vol. 20(4), pages 802-22, November.
    8. Ashenfelter, Orley & Card, David, 1986. "Why Have Unemployment Rates in Canada and the United States Diverged?," Economica, London School of Economics and Political Science, vol. 53(210(S)), pages S171-95, Supplemen.
    9. Lawrence H. Summers, 1986. "Why is the Unemployment Rate So Very High near Full Employment," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 17(2), pages 339-396.
    10. M. W. Keil & J. S. V. Symons, 1990. "An Analysis of Canadian Unemployment," Canadian Public Policy, University of Toronto Press, vol. 16(1), pages 1-16, March.
    11. Cletus C. Coughlin & Thomas B. Mandelbaum, 1988. "Why have state per capita incomes diverged recently?," Review, Federal Reserve Bank of St. Louis, issue Sep, pages 24-36.
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