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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

Suggested Citation

  • Paul A. Storer & Marc A. van Audenrode, 1998. "Exploring the Links between Wage Inequality and Unemployment: A Comparison of Canada and the US," Canadian Public Policy, University of Toronto Press, vol. 24(s1), pages 233-253, February.
  • Handle: RePEc:cpp:issued:v:24:y:1998:i:s1:p:233-253

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    References listed on IDEAS

    1. Layard, R. & Nickell, S., 1991. "Unemployment in the OECD Countries," Economics Series Working Papers 99130, University of Oxford, Department of Economics.
    2. DiNardo, John & Fortin, Nicole M & Lemieux, Thomas, 1996. "Labor Market Institutions and the Distribution of Wages, 1973-1992: A Semiparametric Approach," Econometrica, Econometric Society, vol. 64(5), pages 1001-1044, September.
    3. 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 302-308, May.
    4. Ruhm, Christopher J, 1992. "Advance Notice and Postdisplacement Joblessness," Journal of Labor Economics, University of Chicago Press, vol. 10(1), pages 1-32, January.
    5. Stephen Donald & David Green & Harry Paarsch, "undated". "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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    Cited by:

    1. Tregenna, F., 2009. "The Relationship Between Unemployment and Earnings Inequality in South Africa," Cambridge Working Papers in Economics 0907, Faculty of Economics, University of Cambridge.
    2. No authors listed, 2017. "Repair the roof when the sun is shining," Working Paper Reihe der AK Wien - Materialien zu Wirtschaft und Gesellschaft 171, Kammer für Arbeiter und Angestellte für Wien, Abteilung Wirtschaftswissenschaft und Statistik.

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