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Jobless Durations of Displaced Workers: A Comparison of Canada and the United States

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  • David Gray
  • Gilles Grenier

Abstract

This paper deals with one fact of the unemployment rate gap between Canada and the United States that started in the early 1980s. We seek to analyse discrepancies in the search behaviour and environment of displaced workers which give rise to a higher observed average jobless duration for Canadian workers. A common hazard function is estimated from a data set which combines comparable information from the American and the Canadian Displaced Worker Surveys for 1986. A descriptive analysis of the characteristics' and the distribution of jobless spells of displaced workers in the two countries reveals some relevant differences across countries. The results from the regression model are roughly similar for the two countries, with the exception of significant differences in the impact of a few variables, such as the cause of displacement (plant closure versus production cutback); there is also a higher degree of negative duration dependence in the US. An empirical decomposition exercise suggests that the differences in the characteristics of displaced workers and their labour markets are relatively more important than differences in the estimated regression coefficients of the corresponding variables in generating a longer average duration in Canada.

Suggested Citation

  • David Gray & Gilles Grenier, 1998. "Jobless Durations of Displaced Workers: A Comparison of Canada and the United States," Canadian Public Policy, University of Toronto Press, vol. 24(s1), pages 152-169, February.
  • Handle: RePEc:cpp:issued:v:24:y:1998:i:s1:p:152-169
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    References listed on IDEAS

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    1. David Card & W. Craig Riddell, 1993. "A Comparative Analysis of Unemployment in Canada and the United States," NBER Chapters,in: Small Differences That Matter: Labor Markets and Income Maintenance in Canada and the United States, pages 149-190 National Bureau of Economic Research, Inc.
    2. Michael Baker & Miles Corak & Andrew Heisz, 1998. "The Labour Market Dynamics of Unemployment Rates in Canada and the United States," Canadian Public Policy, University of Toronto Press, vol. 24(s1), pages 72-89, February.
    3. Jones, Stephen R G & Kuhn, Peter, 1995. "Mandatory Notice and Unemployment," Journal of Labor Economics, University of Chicago Press, vol. 13(4), pages 599-622, October.
    4. Kiefer, Nicholas M, 1988. "Economic Duration Data and Hazard Functions," Journal of Economic Literature, American Economic Association, vol. 26(2), pages 646-679, June.
    5. Denise J. Doiron & W. Craig Riddell, 1994. "The Impact of Unionization on Male-Female Earnings Differences in Canada," Journal of Human Resources, University of Wisconsin Press, vol. 29(2), pages 504-534.
    6. Fortin, Mario, 1994. "L’écart de chômage entre le Canada et les États-Unis : analyse des divergences entre les hommes et les femmes," L'Actualité Economique, Société Canadienne de Science Economique, vol. 70(3), pages 247-270, septembre.
    7. Oaxaca, Ronald, 1973. "Male-Female Wage Differentials in Urban Labor Markets," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 14(3), pages 693-709, October.
    8. Green, David A & Riddell, W Craig, 1997. "Qualifying for Unemployment Insurance: An Empirical Analysis," Economic Journal, Royal Economic Society, vol. 107(440), pages 67-84, January.
    9. Lawrence F. Katz & Bruce D. Meyer, 1990. "Unemployment Insurance, Recall Expectations, and Unemployment Outcomes," The Quarterly Journal of Economics, Oxford University Press, vol. 105(4), pages 973-1002.
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    Cited by:

    1. Tiff Macklem & Francisco Barillas, 2005. "Recent Developments in the Canada-US Unemployment Rate Gap: Changing Patterns in Unemployment Incidence and Duration," Canadian Public Policy, University of Toronto Press, vol. 31(1), pages 101-108, March.

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