Recent Developments in the Canada-US Unemployment Rate Gap: Changing Patterns in Unemployment Incidence and Duration

The ins and outs of unemployment in Canada, 1976–2008

“…Baker, Corak, and Heisz (1998) found a countercyclical pattern in the incidence rates or entrance shares of unemployment in Canada between 1980 and 1993. Macklem and Barillas (2005) also observed a countercyclical pattern in the incidence of new unemployment spells between 1976 and 2004. These previous findings on unemployment incidence correspond to the countercyclical pattern the inflow hazard exhibits in this paper.…”

“…These previous findings on unemployment incidence correspond to the countercyclical pattern the inflow hazard exhibits in this paper. Macklem and Barillas (2005) also found a procyclical pattern in the duration of unemployment spells between 1976 and 1997. As noted earlier, they also found a steady decrease in the duration of unemployment spells after 1997.…”

“…More specifically, there is an upward trend in the outflow hazard after 1997. Baker, Corak, and Heisz (1998) found a countercyclical pattern in the incidence rates or entrance shares of unemployment in Canada between 1980and 1993. Macklem and Barillas (2005 also observed a countercyclical pattern in the incidence of new unemployment spells between 1976 and 2004.…”

“…Earlier empirical studies from Canada have used employment data, unemployment data or both, and methodologies that have estimated transition rates between different labour market states (Jones 1993; Jones and Riddell 1999, 2006), expected durations and incidence rates (Baker, Corak, and Heisz 1998; Tille 1999), job retention rates (Green and Riddell 1997; Heisz 2005; Brochu 2009) and also conducted more descriptive analyses of the incidence and duration of unemployment (Macklem and Barillas 2005). The U.S. literature examining flows into and out of unemployment is more extensive (e.g., among others, Perry 1972; Sider 1985; Blanchard and Diamond 1990; Baker 1992; Abbring, van den Berg, and van Ours 2001; Hall 2005; Yashiv 2007; Shimer 2007; Elsby, Michaels, and Solon 2009; Fujita and Ramey 2009).…”

Time Variation in the Dynamics of Worker Flows: Evidence From North America and Europe

“…Campolieti (2011) also observed an increase in the Canadian job-finding hazard around 1997. This increase in the rate at which the unemployed find jobs is equivalent to a decrease in unemployment duration, which is also seen in Macklem and Barillas (2005). However, as noted in Campolieti (2011), the reasons for this increase in the job-finding rate from unemployment are unclear.…”