Accounting for Unemployment--A Labour Market Perspective
The author examines whether prolonged high unemployment in Canada can be attributed to various "structural" causes, rather than t o demand deficiency as found by macroeconometric models. The answer i s largely negative. Neither the dispersion of sectoral growth rates n or excessive and rigid real wages can convincingly account for most u nemployment. Contentions to the contrary are based upon inappropriate partial analyses. Enduring shifts in industrial structure have, if a nything, been declining. Labor mobility is high. Much unemployment la sts too long to be frictional. Fuller quantitative understanding of t he nature of unemployment can be achieved only in a more general fram ework.
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Volume (Year): 20 (1987)
Issue (Month): 4 (November)
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