Unemployment Persistence and Costly Adjustment of Labour: A Canada-US Comparison
Research aimed at explaining the greater persistence of unemployment in European countries relative to the US has found higher employment adjustment costs in Europe to be a significant contributing factor. This paper explores the potential for costly adjustment of labour to explain at least some of the persistence in Canadian unemployment rates relative to US rates. In contrast to what one might expect, our results suggest that relative adjustment costs are very similar in both countries, as are the speeds of adjustment of labour demand. These findings suggest that employment adjustment costs are not a leading candidate to account for the greater persistence of unemployment in Canada relative to the US.
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Volume (Year): 24 (1998)
Issue (Month): s1 (February)
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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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