The Labour Market Dynamics of Unemployment Rates in Canada and the United States
We develop a framework for the dynamic analysis of unemployment and use it to examine the difference in unemployment rates between Canada and the United States over the period 1980-1993. An examination of both the incidence and the duration of unemployment uncovers a series of stylized facts that explanations of persistently higher Canadian unemployment rates should recognize. Cyclical variations in the unemployment rate differential are due about equally to relative changes in spell duration and incidence. A decrease in the incidence of unemployment in the US relative to Canada is the major factor determining the trend in the unemployment rate gap. Finally, while the composition of unemployment is very different between the two countries - permanent job loss being more important in Canada and labour market entry and re-entry more important in the US - these differences are not the cause of longer spell lengths in Canada. Unemployment spells last longer in Canada for all groups of unemployed regardless of reason for unemployment.
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Volume (Year): 24 (1998)
Issue (Month): s1 (February)
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References listed on IDEAS
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- 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.
- Baker, G M & Trivedi, P K, 1985. "Estimation of Unemployment Duration from Grouped Data: A Comparative Study," Journal of Labor Economics, University of Chicago Press, vol. 3(2), pages 153-74, April.
- Ross D. Milbourne & Douglas D. Purvis & W. David Scoones, 1991.
"Unemployment Insurance and Unemployment Dynamics,"
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Canadian Economics Association, vol. 24(4), pages 804-26, November.
- Baker, Michael, 1992. "Unemployment Duration: Compositional Effects and Cyclical Variability," American Economic Review, American Economic Association, vol. 82(1), pages 313-21, March.
- Miles Corak & Stephen R. G. Jones, 1995. "The Persistence of Unemployment: How Important Were Regional Extended Unemployment Insurance Benefits?," Canadian Journal of Economics, Canadian Economics Association, vol. 28(3), pages 555-67, August.
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