Canadian and US Unemployment Rates: A Comparison Based on Regional Data
This paper sets out to explain the Canadian-US unemployment rate gap that has persisted since 1982. The gap, which appeared in two stages, has lasted through peaks and troughs in economic activity. We use a panel of five Canadian and nine US regions to search for the causes. The 1971 liberalization of the Canadian unemployment insurance system can explain the first occurrence of the gap, which was veiled by preferable raw material price movements during the 1970s. The further widening of the gap in the '90s is the result of the tougher post 1987 Bank of Canada stance in fighting inflation.
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Volume (Year): 24 (1998)
Issue (Month): s1 (February)
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- David Card & W. Craig Riddell, 1993.
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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.
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- Kevin Lang & Jay Zagorsky, 1998. "Why are Canadian and US Unemployment Rates So Highly Correlated?," Canadian Public Policy, University of Toronto Press, vol. 24(s1), pages 56-71, February.
- John McCallum, 1987. "Unemployment in Canada and the United States," Canadian Journal of Economics, Canadian Economics Association, vol. 20(4), pages 802-822, November.
- Fortin, Pierre, 1984. "Unemployment insurance meets the classical labor supply model," Economics Letters, Elsevier, vol. 14(2-3), pages 275-281. Full references (including those not matched with items on IDEAS)
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