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Behavioural Response to UI Reform in Constrained and Unconstrained Models of Labour Supply


  • Shelley A. Phipps


This paper investigates how taking account of demand-side constraints affects estimated models of labor supply and, hence, predicted behavioral responses to unemployment insurance reform in Canada. Constrained and unconstrained labor-supply equations are estimated for single men and women using microdata from the 1982 Survey of Consumer Finance. Detailed modeling of the impact of the Canadian unemployment insurance program on individual budget constraints enables the simulation of behavioral responses to the unemployment insurance reform proposals of the Forget and Macdonald commissions. Results indicate that in a high-unemployment economy, labor-supply responses will be negligible.

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  • 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.
  • Handle: RePEc:cje:issued:v:24:y:1991:i:1:p:34-54

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    References listed on IDEAS

    1. Choudhri, Ehsan U & Kochin, Levis A, 1980. "The Exchange Rate and the International Transmission of Business Cycle Disturbances: Some Evidence from the Great Depression," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 12(4), pages 565-574, November.
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    Cited by:

    1. Lars Osberg, 1996. "Economic Policy Variables and Population Health," Department of Economics at Dalhousie University working papers archive healthy, Dalhousie, Department of Economics.
    2. Kapsalis, Constantine, 2000. "The Impact of Bill C-12 on New Entrants and Re-Entrants," MPRA Paper 26137, University Library of Munich, Germany.
    3. Benoit Dostie, 2012. "Labour Supply and Taxes: New Estimates of the Responses of Wives to Husbands’ Wages," Cahiers de recherche 12-02, HEC Montréal, Institut d'économie appliquée.
    4. Hassan Bougrine & Mario Seccareccia, 1999. "Unemployment Insurance and Unemployment: An analysis of the aggregate demand-side effects for postwar Canada," International Review of Applied Economics, Taylor & Francis Journals, vol. 13(1), pages 5-21.
    5. Smith Conway, Karen & Kimmel, Jean, 1998. "Male labor supply estimates and the decision to moonlight," Labour Economics, Elsevier, vol. 5(2), pages 135-166, June.

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