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Regional Convergence and the Role of Federal Transfers in Canada

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Author Info

  • Phillip Swagel
  • Steven Vincent Dunaway
  • Martin David Kaufman

Abstract

Differences in per capita output across Canadian provinces have narrowed less than disparities in per capita income in past decades. Using a panel regression framework, this paper studies the differential impact of federal transfer programs on output convergence. The evidence suggests that while the Employment Insurance (EI) system seems to have had a significant negative effect on output convergence?by discouraging migration within Canada?the Equalization transfers may have helped spur convergence. The EI system, despite reforms introduced in the 1990s, still appears to contain features that deter labor mobility.

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Bibliographic Info

Paper provided by International Monetary Fund in its series IMF Working Papers with number 03/97.

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Length: 14
Date of creation: 01 May 2003
Date of revision:
Handle: RePEc:imf:imfwpa:03/97

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Related research

Keywords: Migration; Employment; Economic models; unemployment; employment insurance; unemployment rate; high unemployment; number of employees; employment demand; labor migration; unemployment insurance; unemployment benefits; self-employment; employment prospects; economic theory; employment assistance; involuntary unemployment; unemployment rates; stable employment;

References

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  1. Bayoumi, Tamim & Masson, Paul R, 1994. "Fiscal Flows in the United States and Canada: Lessons for Monetary Union in Europe," CEPR Discussion Papers 1057, C.E.P.R. Discussion Papers.
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Citations

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Cited by:
  1. Christian Leßmann, 2006. "Fiscal Decentralization and Regional Disparity: A Panel Data Approach for OECD Countries," Ifo Working Paper Series Ifo Working Papers No. 25, Ifo Institute for Economic Research at the University of Munich.
  2. Christian Lessmann, 2011. "Regional Inequality and Decentralization - An Empirical Analysis," CESifo Working Paper Series 3568, CESifo Group Munich.
  3. Checherita-Westphal, Cristina & Nickel, Christiane & Rother, Philipp, 2009. "The role of fiscal transfers for regional economic convergence in Europe," Working Paper Series 1029, European Central Bank.
  4. Kessler, Anke & Lessmann, Christian, 2010. "Interregional Redistribution and Regional Disparities: How Equalization Does (Not) Work," CEPR Discussion Papers 8133, C.E.P.R. Discussion Papers.
  5. Uma Ramakrishnan & Martin D. Cerisola, 2004. "Regional Economic Disparities in Australia," IMF Working Papers 04/144, International Monetary Fund.
  6. Basher, Syed A. & Fachin, Stefano, 2008. "The long-term decline of internal migration in Canada – Ontario as a case study," MPRA Paper 6685, University Library of Munich, Germany.
  7. Henri Capron, 2007. "Fédéralisme, transferts interrégionaux et croissance régionale," Reflets et perspectives de la vie économique, De Boeck Université, vol. 0(1), pages 45-63.
  8. Bilal MEHMOOD & Parvez AZIM, 2013. "Does ICT Participate in Economic Convergence among Asian Countries: Evidence from Dynamic Panel Data Model," Informatica Economica, Academy of Economic Studies - Bucharest, Romania, vol. 17(2), pages 7-16.

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