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Unemployment, Marginal Attachment and Labor Force Participation in Canada and the United States

Author

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  • Jones, Stephen R. G.

    (McMaster University)

  • Riddell, W. Craig

    (University of British Columbia, Vancouver)

Abstract

We analyze changes in unemployment, marginal labor force attachment and participation in Canada and the U.S.. Using two complementary decompositions, we show the importance for the comparative evolution of aggregate unemployment of changes in the fraction of the non-employed who are unemployed and in the fraction of the unemployed who 'want work'. Using microdata we study labor market transition behavior at these margins, finding remarkably consistent results in the two countries, with the marginally attached displaying behavior lying between unemployment and non-attachment. The three non-employment states are distinct from one another in both Canada and the U.S.

Suggested Citation

  • Jones, Stephen R. G. & Riddell, W. Craig, 2017. "Unemployment, Marginal Attachment and Labor Force Participation in Canada and the United States," IZA Discussion Papers 10769, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp10769
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    References listed on IDEAS

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    1. Lange, Fabian & Kudlyak, Marianna, 2014. "Measuring Heterogeneity in Job Finding Rates Among the Nonemployed Using Labor Force Status Histories," IZA Discussion Papers 8663, Institute of Labor Economics (IZA).
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    4. Rothstein, Jesse, 2011. "Unemployment Insurance and Job Search in the Great Recession," Institute for Research on Labor and Employment, Working Paper Series qt5611t356, Institute of Industrial Relations, UC Berkeley.
    5. Stephen R. G. Jones & W. Craig Riddell, 1999. "The Measurement of Unemployment: An Empirical Approach," Econometrica, Econometric Society, vol. 67(1), pages 147-162, January.
    6. Alan B. Krueger & Judd Cramer & David Cho, 2014. "Are the Long-Term Unemployed on the Margins of the Labor Market?," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 45(1 (Spring), pages 229-299.
    7. Jesse Rothstein, 2011. "Unemployment Insurance and Job Search in the Great Recession," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 42(2 (Fall)), pages 143-213.
    8. Alan B. Krueger & Judd Cramer & David Cho, 2014. "Are the Long-Term Unemployed on the Margins of the Labor Market?," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 48(1 (Spring), pages 229-299.
    9. Regis Barnichon & Andrew Figura, 2016. "Declining Desire to Work and Downward Trends in Unemployment and Participation," NBER Macroeconomics Annual, University of Chicago Press, vol. 30(1), pages 449-494.
    10. Robert Shimer, 2012. "Reassessing the Ins and Outs of Unemployment," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 15(2), pages 127-148, April.
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    Cited by:

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    2. Veronica Minaya & Brendan Moore & Judith Scott-Clayton, 2020. "The Effect of Job Displacement on College Enrollment: Evidence from Ohio," NBER Working Papers 27694, National Bureau of Economic Research, Inc.
    3. James (Jim) C. MacGee & Joel Rodrigue, 2024. "The Distributional Origins of the Canada-US GDP and Labour Productivity Gaps," Staff Working Papers 24-49, Bank of Canada.
    4. Thomas Lemieux & Kevin Milligan & Tammy Schirle & Mikal Skuterud, 2020. "Initial Impacts of the COVID-19 Pandemic on the Canadian Labour Market," Canadian Public Policy, University of Toronto Press, vol. 46(S1), pages 55-65, July.
    5. Domenico Ferraro & Giuseppe Fiori, 2023. "Search Frictions, Labor Supply, and the Asymmetric Business Cycle," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 55(1), pages 5-42, February.
    6. Baert, Stijn, 2021. "The iceberg decomposition: A parsimonious way to map the health of labour markets," Economic Analysis and Policy, Elsevier, vol. 69(C), pages 350-365.
    7. Pierre Brochu & Jonathan Crechet, 2022. "Survey Non-Response in COVID-19 Times: The Case of the Labour Force Survey," Canadian Public Policy, University of Toronto Press, vol. 48(3), pages 451-472, September.
    8. Stephen R.G. Jones & Fabian Lange & W. Craig Riddell & Casey Warman, 2023. "The great Canadian recovery: The impact of COVID‐19 on Canada's labour market," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 56(3), pages 791-838, August.
    9. Qian Sun, 2024. "Constructing alternative unemployment statistics in China," Empirical Economics, Springer, vol. 67(4), pages 1319-1354, October.
    10. Cui, Jing, 2025. "Older individuals’ labour force participation during COVID-19," The Journal of the Economics of Ageing, Elsevier, vol. 30(C).
    11. Daniel Fredriksson, 2020. "Moving targets: Target groups of active labour market policies and transitions to employment in Europe," International Journal of Social Welfare, John Wiley & Sons, vol. 29(3), pages 270-284, July.
    12. Song, Chen & Wei, Chao, 2019. "Unemployment or out of the labor force: A perspective from time allocation," Labour Economics, Elsevier, vol. 61(C).
    13. Simmons, Michael, 2023. "Job-to-job transitions, job finding and the ins of unemployment," Labour Economics, Elsevier, vol. 80(C).
    14. W. Craig Riddell, 2018. "The labor market in Canada, 2000–2016," IZA World of Labor, Institute of Labor Economics (IZA), pages 432-432, April.

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    Keywords

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    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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