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Convergence In The Canadian Provinces: Evidence Using Unemployment Rates

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Listed:
  • Firouz Fallahi

    (University of Tabriz, Irán)

  • Gabriel Rodríguez

    (Departamento de Economía - Pontificia Universidad Católica del Perú)

Abstract

Quarterly time series data from Canada and the Canadian provinces for the period 1976:1-2005:3 are examined to determine if the unemployment rates in the Canadian provinces are converging to the national rate of unemployment. Firstly, we check for existence of stochastic convergence using recent unit root statistics, see Perron and Rodríguez (2003) and Rodríguez (2007). Secondly, we verify for existence of ??convergence using recently proposed methods by Vogel-sang (1998), Perron and Yabu (2009a, 2009b), and Bai and Perron (1998, 2003). Results from di¤erent unit root tests, without and with structural breaks, confirm that stochastic convergence exists in all provinces except British Columbia.The other results show strong evidence that deterministic convergence exists and the unemployment rates of the Canadian provinces are converging to the un-employment rate of Canada. This conclusion is stronger when multiple breaks are allowed in the trend function using the approach of Bai and Perron (1998,2003).

Suggested Citation

  • Firouz Fallahi & Gabriel Rodríguez, 2011. "Convergence In The Canadian Provinces: Evidence Using Unemployment Rates," Documentos de Trabajo / Working Papers 2011-322, Departamento de Economía - Pontificia Universidad Católica del Perú.
    • Handle: RePEc:pcp:pucwps:wp00322
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    File URL: http://files.pucp.edu.pe/departamento/economia/DDD322.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    Stochastic convergence; -convergence; unit roots; structural breaks; unemployment.;
    All these keywords.

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General

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