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How Much of Canada's Unemployment is Structural?

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  • Lars Osberg
  • Zhengxi Lin

Abstract

This paper starts from the definition that "structural unemployment occurs when workers are unable to fill available jobs because they lack the skills, do not live where jobs are available, or are unwilling to work at the wage rate offered in the market." This implies that the number of vacancies in the Canadian labour market is an upper bound to the extent of "structural unemployment." The paper summarizes available estimates of the vacancy rate in Canada. In the high technology sector, vacancies may be equivalent to 2.2 percent of the labour force but evidence from more respresentative surveys indicates a range of 0.45 to 0.75 percent for the economy as a whole. Although during the 1980s the outward shift in the relationship between the Help-Wanted Index and the unemployment rate raised concerns that structural unemployment was an increasing problem in Canada, that shift has been reversed in the 1990s.

Suggested Citation

  • Lars Osberg & Zhengxi Lin, 2000. "How Much of Canada's Unemployment is Structural?," Canadian Public Policy, University of Toronto Press, vol. 26(s1), pages 141-157, July.
  • Handle: RePEc:cpp:issued:v:26:y:2000:i:s1:p:141-157
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    References listed on IDEAS

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    1. Richard Archambault & Mario Fortin, 2001. "The Beveridge curve and unemployment fluctuations in Canada," Canadian Journal of Economics, Canadian Economics Association, vol. 34(1), pages 58-81, February.
    2. Pierre Fortin, 1999. "The great Canadian slump: a rejoinder to Freedman and Macklem," Canadian Journal of Economics, Canadian Economics Association, vol. 32(4), pages 1082-1092, August.
    3. Boothby, D., 1995. "COPS : A Revised Demand Side," Papers t-95-2, Gouvernement du Canada - Human Resources Development.
    4. Abraham, Katharine G, 1983. "Structural-Frictional vs. Deficient Demand Unemployment: Some New Evidence," American Economic Review, American Economic Association, vol. 73(4), pages 708-724, September.
    5. Reid, Frank & Meltz, Noah M, 1979. "Causes of Shifts in the Unemployment-Vacancy Relationship: An Empirical Analysis for Canada," The Review of Economics and Statistics, MIT Press, vol. 61(3), pages 470-475, August.
    6. Chantal Dupasquier & Alain Guay & Pierre St-Amant, 1997. "A Comparison of Alternative Methodologies for Estimating Potential Output and the Output Gap," Staff Working Papers 97-5, Bank of Canada.
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    Cited by:

    1. Sandra Hanson MCPHERSON & Oscar FLORES, 2012. "Provincial Disparities and Structural Unemployment in Canada," Regional and Sectoral Economic Studies, Euro-American Association of Economic Development, vol. 12(1), pages 25-42.
    2. Aysun, Uluc & Bouvet, Florence & Hofler, Richard, 2014. "An alternative measure of structural unemployment," Economic Modelling, Elsevier, vol. 38(C), pages 592-603.
    3. Morissette, Rene & Zhang, Xuelin, 2001. "Quelles entreprises ont des taux de vacance eleves au Canada?," Direction des etudes analytiques : documents de recherche 2001176f, Statistics Canada, Direction des etudes analytiques.
    4. Heisz, Andrew & Nakamura, A. & Picot, Garnett, 2001. "Job Tenure, Worker Mobility and the Youth Labour Market During the 1990s," Analytical Studies Branch Research Paper Series 2001155e, Statistics Canada, Analytical Studies Branch.
    5. Roa Maria J & Vazquez Francisco Jose & Saura Dulce, 2008. "Unemployment and Economic Growth Cycles," Studies in Nonlinear Dynamics & Econometrics, De Gruyter, vol. 12(2), pages 1-21, May.
    6. Morissette, Rene & Zhang, Xuelin, 2001. "Which Firms Have High Job Vacancy Rates in Canada?," Analytical Studies Branch Research Paper Series 2001176e, Statistics Canada, Analytical Studies Branch.

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