IDEAS home Printed from https://ideas.repec.org/a/cje/issued/v21y1988i1p161-81.html
   My bibliography  Save this article

The Welfare Cost of Unemployment in Quebec: Harberger's Triangle Meets Okun's Gap

Author

Listed:
  • Bernard Fortin
  • Andre Bernier

Abstract

Using duality theory under rationing, the authors derive a measure of the aggr egate welfare cost of cyclical unemployment, which takes into account the value of additional nonmarket activities promoted by unemploymen t. This measure is then applied to the Quebec economy, using benchmar k general equilibrium data for 1980. Comparisons are made between the results obtained from the author's welfare measure and from the redu ction in GNP, as measured by Okun gap. According to their simulations , the overestimating bias of the cost of cyclical unemployment in Que bec, as measured by Okun gap, varies between 3 and 20 percent, depend ing on the assumptions used. The bias is more important, however, whe n a permanent increase in the unemployment rate is simulated.

Suggested Citation

  • Bernard Fortin & Andre Bernier, 1988. "The Welfare Cost of Unemployment in Quebec: Harberger's Triangle Meets Okun's Gap," Canadian Journal of Economics, Canadian Economics Association, vol. 21(1), pages 161-181, February.
    • Handle: RePEc:cje:issued:v:21:y:1988:i:1:p:161-81
    as

    Download full text from publisher

    File URL: http://links.jstor.org/sici?sici=0008-4085%28198802%2921%3A1%3C161%3ATWCOUI%3E2.0.CO%3B2-L
    Download Restriction: only available to JSTOR subscribers
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Daniel L. Thornton, 1996. "The costs and benefits of price stability: an assessment of Howitt's rule," Review, Federal Reserve Bank of St. Louis, vol. 78(Mar), pages 23-38.
    2. Inmaculada Garcia & Jose Alberto Molina, 1998. "Household labour supply with rationing in Spain," Applied Economics, Taylor & Francis Journals, vol. 30(12), pages 1557-1570.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cje:issued:v:21:y:1988:i:1:p:161-81. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Prof. Werner Antweiler (email available below). General contact details of provider: https://edirc.repec.org/data/ceaaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.