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A new look at variation in employment growth in Canada: The role of industry, provincial, national and external factors

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  • Campolieti, Michele
  • Gefang, Deborah
  • Koop, Gary

Abstract

We examine fluctuations in employment growth using Canadian data from 1976 to 2010. We consider a wide range of models and examine the sensitivity of our findings to modelling assumptions. The results from our most preferred model, which we selected using the Bayesian Information Criteria, indicate that most of the variance in employment growth that is not due to the idiosyncratic error comes from domestic sources, with most of this coming from industry and provincial factors. Overall, we find that external and national factors play a much smaller role in employment fluctuations than in earlier research. We provide some possible explanations for these differences and discuss the implications of our findings for public policy and theory.

Suggested Citation

  • Campolieti, Michele & Gefang, Deborah & Koop, Gary, 2014. "A new look at variation in employment growth in Canada: The role of industry, provincial, national and external factors," Journal of Economic Dynamics and Control, Elsevier, vol. 41(C), pages 257-275.
  • Handle: RePEc:eee:dyncon:v:41:y:2014:i:c:p:257-275
    DOI: 10.1016/j.jedc.2014.02.005
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    References listed on IDEAS

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    More about this item

    Keywords

    Employment fluctuations; Dynamic factor model; Disaggregated shocks; Domestic shocks; External shocks;

    JEL classification:

    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General
    • C11 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Bayesian Analysis: General
    • C38 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Classification Methdos; Cluster Analysis; Principal Components; Factor Analysis

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