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Exploring the Links between Wage Inequality and Unemployment: A Comparison of Canada and the US

  • Paul A. Storer
  • Marc A. van Audenrode

This paper examines the links between the unemployment rate gap and wage inequality in the US and Canada. Survey data for displaced workers from the early 1980s are compared for the two countries to examine differenes in wages obtained after displacement. We look at all workers and subgroups of the population and compare entire wage distributions between the countries. While we find a tighter wage-change distribution in Canada, our results do not indicate that this is primarily due to more generous unemployment insurance in Canada. Unemployment insurance does, however, improve wage outcomes for the long-term unemployed in Canada

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Article provided by University of Toronto Press in its journal Canadian Public Policy.

Volume (Year): 24 (1998)
Issue (Month): s1 (February)
Pages: 233-253

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Handle: RePEc:cpp:issued:v:24:y:1998:i:s1:p:233-253
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  1. Richard Layard & Stephen Nickell, 1992. "Unemployment in the OECD Countries," CEP Discussion Papers dp0081, Centre for Economic Performance, LSE.
  2. Nidardo, J. & Fortin, N. & Lemieux, T., 1994. "Labor Market Institutions and the Distribution of Wages, 1973-1992: A Semiparametric Approach," Papers 93-94-15, California Irvine - School of Social Sciences.
  3. Ruhm, Christopher J, 1992. "Advance Notice and Postdisplacement Joblessness," Journal of Labor Economics, University of Chicago Press, vol. 10(1), pages 1-32, January.
  4. Nickell, Stephen & Bell, Brian, 1996. "Changes in the Distribution of Wages and Unemployment in OECD Countries," American Economic Review, American Economic Association, vol. 86(2), pages 302-08, May.
  5. Stephen Donald & David Green & Harry Paarsch, . "Differences in Earnings and Wage Distributions between Canada and the United States: An Application of a Semi-Parametric Estimator of Distribution Functions with Covariates," Working Papers _003, University of California at Berkeley, Econometrics Laboratory Software Archive.
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