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Decomposition of the Unemployment Gap between Canada and the United States: Duration or Incidence?

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  • Cédric Tille

Abstract

This paper examines whether the unemployment gap between Canada and the US arises from longer unemployment spells or a higher risk of experiencing unemployment in Canada, as the former case has stronger policy implications. We find that the Canadian situation is characterized by longer unemployment spells for men, and a higher risk of experiencing unemployment for women. This indicates that the policy against unemployment should be targeted on the long-term unemployed to reduce the future persistence of unemployment, and that further research in the exact causes of the higher duration of unemployment is relevant.

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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: 90-102

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Handle: RePEc:cpp:issued:v:24:y:1998:i:s1:p:90-102

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  1. Layard, R. & Bean, C., 1988. "Why Does Unemployment Persist?," Papers 321, London School of Economics - Centre for Labour Economics.
  2. Pissarides, Christopher A, 1992. "Loss of Skill during Unemployment and the Persistence of Employment Shocks," The Quarterly Journal of Economics, MIT Press, vol. 107(4), pages 1371-91, November.
  3. Stephen W. Salant, 1974. "Search theory and duration data: a theory of sorts," Special Studies Papers 42, Board of Governors of the Federal Reserve System (U.S.).
  4. Olivier J. Blanchard & Lawrence H. Summers, 1986. "Hysteresis and the European Unemployment Problem," NBER Working Papers 1950, National Bureau of Economic Research, Inc.
  5. Budd, Alan & Levine, Paul & Smith, Peter, 1988. "Unemployment, Vacancies and the Long-term Unemployed," Economic Journal, Royal Economic Society, vol. 98(393), pages 1071-91, December.
  6. Jackman, Richard & Layard, Richard, 1991. "Does Long-term Unemployment Reduce a Person's Chance of a Job? A Time-Series Test," Economica, London School of Economics and Political Science, vol. 58(229), pages 93-106, February.
  7. Stephen T. Marston, 1976. "Employment Instability and High Unemployment Rates," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 7(1), pages 169-210.
  8. Lars Ljungqvist & Thomas J. Sargent, 1995. "The European unemployment dilemma," Working Paper Series, Macroeconomic Issues 95-17, Federal Reserve Bank of Chicago.
  9. Heisz, Andrew & Baker, Michael & Corak, Miles, 1996. "Unemployment in the Stock and Flow," Analytical Studies Branch Research Paper Series 1997097e, Statistics Canada, Analytical Studies Branch.
  10. Akerlof, George A & Yellen, Janet L, 1985. "Unemployment through the Filter of Memory," The Quarterly Journal of Economics, MIT Press, vol. 100(3), pages 747-73, August.
  11. Lockwood, Ben, 1991. "Information Externalities in the Labour Market and the Duration of Unemployment," Review of Economic Studies, Wiley Blackwell, vol. 58(4), pages 733-53, July.
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Cited by:
  1. Tiff Macklem & Francisco Barillas, 2005. "Recent Developments in the Canada-US Unemployment Rate Gap: Changing Patterns in Unemployment Incidence and Duration," Canadian Public Policy, University of Toronto Press, vol. 31(1), pages 101-108, March.

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