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Long Time Out: Unemployment and Joblessness in Canada and the United States

In: Small Differences II: Public Policies in Canada and the United States

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  • Kory Kroft
  • Fabian Lange
  • Matthew J. Notowidigdo
  • Matthew Tudball

Abstract

We compare patterns of unemployment between Canada and the United States during the Great Recession. We document a rise in long-term unemployment in Canada, similar to findings in earlier work. We consider an extended matching model using restricted-access data from the Canadian Labour Force Survey, which contains information on time since last job for both unemployed and nonparticipants. We create a new historical vacancy series for Canada based on relative employment in “recruiting industries” to construct a monthly Beveridge curve for Canada. Allowing for duration dependence in flows between unemployment and nonparticipation is crucial for explaining long-term joblessness.
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  • Kory Kroft & Fabian Lange & Matthew J. Notowidigdo & Matthew Tudball, 2016. "Long Time Out: Unemployment and Joblessness in Canada and the United States," NBER Chapters, in: Small Differences II: Public Policies in Canada and the United States, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberch:14319
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    1. Farber, Henry S & Silverman, Dan & Wachter, Till von, 2015. "Factors Determining Callbacks to Job Applications by the Unemployed: An Audit Study," IZA Discussion Papers 9465, Institute of Labor Economics (IZA).
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    3. Kory Kroft & Fabian Lange & Matthew J. Notowidigdo & Lawrence F. Katz, 2016. "Long-Term Unemployment and the Great Recession: The Role of Composition, Duration Dependence, and Nonparticipation," Journal of Labor Economics, University of Chicago Press, vol. 34(S1), pages 7-54.
    4. Marianna Kudlyak & Fabian Lange, 2014. "Measuring Heterogeneity in Job Finding Rates Among the Nonemployed Using Labor Force Status Histories," Working Paper 14-18, Federal Reserve Bank of Richmond.
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    10. Camille Landais & Pascal Michaillat & Emmanuel Saez, 2018. "A Macroeconomic Approach to Optimal Unemployment Insurance: Applications," American Economic Journal: Economic Policy, American Economic Association, vol. 10(2), pages 182-216, May.
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    13. Kory Kroft & Fabian Lange & Matthew J. Notowidigdo, 2013. "Duration Dependence and Labor Market Conditions: Evidence from a Field Experiment," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 128(3), pages 1123-1167.
    14. Camille Landais & Pascal Michaillat & Emmanuel Saez, 2018. "A Macroeconomic Approach to Optimal Unemployment Insurance: Theory," American Economic Journal: Economic Policy, American Economic Association, vol. 10(2), pages 152-181, May.
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    17. Johannes F. Schmieder & Till von Wachter & Stefan Bender, 2016. "The Effect of Unemployment Benefits and Nonemployment Durations on Wages," American Economic Review, American Economic Association, vol. 106(3), pages 739-777, March.
    18. Andreas Hornstein & Marianna Kudlyak & Fabian Lange, 2014. "Measuring Resource Utilization in the Labor Market," Economic Quarterly, Federal Reserve Bank of Richmond, issue 1Q, pages 1-21.
    19. Gregor Jarosch & Laura Pilossoph, 2019. "Statistical Discrimination and Duration Dependence in the Job Finding Rate," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 86(4), pages 1631-1665.
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    Cited by:

    1. Rebecca M. Aldrich & Debbie Laliberte Rudman & Na Eon (Esther) Park & Suzanne Huot, 2020. "Centering the Complexity of Long-Term Unemployment: Lessons Learned from a Critical Occupational Science Inquiry," Societies, MDPI, vol. 10(3), pages 1-22, September.
    2. Lalé, Etienne, 2024. "Assessing Labor Market Conditions in Canada with Public-Use Microdata," IZA Discussion Papers 16722, Institute of Labor Economics (IZA).
    3. Yuan, Wen Jin & Antonio, Katherine & Butcher, Arona, 2022. "Incorporating Industry-Specific Wages and Unemployment into the GTAP Model: U.S.-EU Trade Liberalization Scenarios," Conference papers 333450, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    4. Pierre Brochu & Jonathan Créchet, 2021. "Survey Non-response in Covid-19 Times: The Case of the Labour Force Survey," Working Papers 2109E, University of Ottawa, Department of Economics.
    5. Song, Chen & Wei, Chao, 2019. "Unemployment or out of the labor force: A perspective from time allocation," Labour Economics, Elsevier, vol. 61(C).

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    More about this item

    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
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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