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Unemployment Invariance Hypothesis, Added and Discouraged Worker Effects in Canada?

Author

Listed:
  • Aysit Tansel

    () (Department of Economics, Middle East Technical University, IZA, ERF Cairo)

  • Zeynel Abidin Ozdemir

    () (Department of Economics, Gazi University, ERF Cairo)

Abstract

This article explores the long-run relationship between unemployment rate and labor force participation rate for men and women in Canada. The co-integration analysis vindicates the existence of a long-run relationship between these two variables. This finding leads us to doubt the pertinence of the unemployment invariance hypothesis for Canada. This is consistent with the empirical studies for Japan, Sweden and the United States, but contradicts the empirical studies for Australia, Romania and Turkey. Further, we find discouraged worker effect for women and added worker effect for men and we elaborate on the possible explanations for this seemingly contradictory finding.

Suggested Citation

  • Aysit Tansel & Zeynel Abidin Ozdemir, 2017. "Unemployment Invariance Hypothesis, Added and Discouraged Worker Effects in Canada?," Koç University-TUSIAD Economic Research Forum Working Papers 1608, Koc University-TUSIAD Economic Research Forum.
    • Handle: RePEc:koc:wpaper:1608
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Unemployment Invariance; Unemployment; Labor Force Participation; Discouraged Worker Effect; Added Worker Effect; Co-integration; Canada.;

    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
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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