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Unemployment Insurance and Unemployment: An analysis of the aggregate demand-side effects for postwar Canada

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  • Hassan Bougrine
  • Mario Seccareccia
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    Abstract

    Most of the theoretical and empirical literature on the effects of unemployment insurance (UI) during the last 25 years has focused on the supply-side implications. The object of this article is to argue that much of those discussions over the disincentive effects of UI is misdirected. Our intention is to bring back to the forefront a discussion of the positive macroeconomic role played by UI net injections in stabilizing aggregate demand. Our empirical results using Canadian data for the postwar period support this Keynesian view of the stabilizing effect of UI in contemporary economies.

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    File URL: http://www.tandfonline.com/doi/abs/10.1080/026921799101706
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    Bibliographic Info

    Article provided by Taylor & Francis Journals in its journal International Review of Applied Economics.

    Volume (Year): 13 (1999)
    Issue (Month): 1 ()
    Pages: 5-21

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    Handle: RePEc:taf:irapec:v:13:y:1999:i:1:p:5-21

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    Web page: http://www.tandfonline.com/CIRA20

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    References

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    1. Fortin, Pierre, 1989. "How 'natural' is Canada's high unemployment rate?," European Economic Review, Elsevier, vol. 33(1), pages 89-110, January.
    2. Shelley A. Phipps, 1991. "Behavioural Response to UI Reform in Constrained and Unconstrained Models of Labour Supply," Canadian Journal of Economics, Canadian Economics Association, vol. 24(1), pages 34-54, February.
    3. Ham, John C & Rea, Samuel A, Jr, 1987. "Unemployment Insurance and Male Unemployment Duration in Canada," Journal of Labor Economics, University of Chicago Press, vol. 5(3), pages 325-53, July.
    4. Clark, Andrew E & Oswald, Andrew J, 1994. "Unhappiness and Unemployment," Economic Journal, Royal Economic Society, vol. 104(424), pages 648-59, May.
    5. Layard, Richard & Nickell, Stephen & Jackman, Richard, 2005. "Unemployment: Macroeconomic Performance and the Labour Market," OUP Catalogue, Oxford University Press, number 9780199279173.
    6. Phipps, Shelley, 1990. "Quantity-Constrainted Household Responses to UI Reform," Economic Journal, Royal Economic Society, vol. 100(399), pages 124-40, March.
    7. Carl Davidson, 1990. "Recent Developments in the Theory of Involuntary Unemployment," Books from Upjohn Press, W.E. Upjohn Institute for Employment Research, number rdtiu.
    8. Feldstein, Martin S, 1978. "The Effect of Unemployment Insurance on Temporary Layoff Unemployment," American Economic Review, American Economic Association, vol. 68(5), pages 834-46, December.
    9. 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..
    10. Atkinson, Anthony B & Micklewright, John, 1991. "Unemployment Compensation and Labor Market Transitions: A Critical Review," Journal of Economic Literature, American Economic Association, vol. 29(4), pages 1679-1727, December.
    11. Grubb, David B & Jackman, Richard A & Layard, Richard G, 1982. "Causes of the Current Stagflation," Review of Economic Studies, Wiley Blackwell, vol. 49(5), pages 707-30, Special I.
    12. Ross D. Milbourne & Douglas D. & W. David Scoones, 1989. "Unemployment Insurance and Unemployment Dynamics," Working Papers 750, Queen's University, Department of Economics.
    13. 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.
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    1. repec:hal:cesptp:halshs-00196500 is not listed on IDEAS
    2. repec:hal:journl:halshs-00196500 is not listed on IDEAS

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