Labor Market Adjustment in Canada and the United States

Author/Editor:

Alun H. Thomas ; Eswar S Prasad

Publication Date:

January 1, 1997

Electronic Access:

Free Full text (PDF file size is 1144 KB).Use the free Adobe Acrobat Reader to view this PDF file

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

This paper provides a quantitative assessment of the relative importance of different labor market adjustment mechanisms in Canada and the United States and also examines the effects of the unemployment insurance (UI) system on labor market adjustment. At the aggregate level, employment growth shocks result in similar unemployment rate responses but smaller wage responses in Canada relative to the United States. Although overall UI generosity has increased aggregate unemployment persistence in Canada, the endogenous component of UI has affected unemployment persistence only marginally. The lower degree of aggregate real wage flexibility in Canada has not been an important determinant of unemployment persistence.

Series:

Working Paper No. 97/2

Subject:

English

Publication Date:

January 1, 1997

ISBN/ISSN:

9781451841725/1018-5941

Stock No:

WPIEA0021997

Price:

$15.00 (Academic Rate:$15.00)

Format:

Paper

Pages:

24

Please address any questions about this title to publications@imf.org