IDEAS home Printed from https://ideas.repec.org/p/stc/stcp3e/1997097e.html
   My bibliography  Save this paper

Unemployment in the Stock and Flow

Author

Listed:
  • Heisz, Andrew
  • Baker, Michael
  • Corak, Miles

Abstract

A framework for the dynamic analysis of unemployment is presented, and applied to Canadian and U.S. data. The focus of the analysis is upon the distinctionbetween being unemployed and becoming unemployed, that is, between the stock and the flow of unemployment. The share of a particular group in the stock ofunemployed will differ from its share in the flow into unemployment to the extent that the average duration of unemployment for the group differs from the economywide average. An analysis of Canadian and U.S. data leads to a series of stylized facts that permit a deeper understanding of unemployment in the two countries, andof the differences between them. Significant differences in the average duration of unemployment imply that stock shares are not good indicators of flow shares,changes in the stock share of some groups are due to changes in the flow share, while for others they are due to changes in the length of unemployment spells.Explanations of the Canada - U.S. unemployment rate gap should try to accommodate at least three facts uncovered by the analysis: (1) that employer initiatedpermanent separations are the primary means of entry into unemployment in Canada, while labour force entry plays a more important role in the US; (2)unemployment spells are significantly longer in Canada than in the U.S. because of longer spells for most groups regardless of reason for unemployment, not becauseof a compositional difference in the make up of the unemployed; and (3) that longer spell duration and a higher incidence of unemployment contribute about equallyto the trend increase in the Canada - U.S. unemployment differential during the 1980s.

Suggested Citation

  • Heisz, Andrew & Baker, Michael & Corak, Miles, 1996. "Unemployment in the Stock and Flow," Analytical Studies Branch Research Paper Series 1997097e, Statistics Canada, Analytical Studies Branch.
    • Handle: RePEc:stc:stcp3e:1997097e
    as

    Download full text from publisher

    File URL: https://www150.statcan.gc.ca/n1/en/catalogue/11F0019M1997097
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Rebecca M. Blank & David E. Card, 1991. "Recent Trends in Insured and Uninsured Unemployment: Is There an Explanation?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 106(4), pages 1157-1189.
    2. David Card & Richard B. Freeman, 1993. "Small Differences That Matter: Labor Markets and Income Maintenance in Canada and the United States," NBER Books, National Bureau of Economic Research, Inc, number card93-1, May.
    3. Baker, G M & Trivedi, P K, 1985. "Estimation of Unemployment Duration from Grouped Data: A Comparative Study," Journal of Labor Economics, University of Chicago Press, vol. 3(2), pages 153-174, April.
    4. M. W. Keil & J. S. V. Symons, 1990. "An Analysis of Canadian Unemployment," Canadian Public Policy, University of Toronto Press, vol. 16(1), pages 1-16, March.
    5. Christofides, Louis N & McKenna, C J, 1996. "Unemployment Insurance and Job Duration in Canada," Journal of Labor Economics, University of Chicago Press, vol. 14(2), pages 286-312, April.
    6. David Card & W. Craig Riddell, 1993. "A Comparative Analysis of Unemployment in Canada and the United States," NBER Chapters, in: Small Differences That Matter: Labor Markets and Income Maintenance in Canada and the United States, pages 149-190, National Bureau of Economic Research, Inc.
    7. Lawrence F. Katz & Bruce D. Meyer, 1990. "Unemployment Insurance, Recall Expectations, and Unemployment Outcomes," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 105(4), pages 973-1002.
    8. Stephen W. Salant, 1977. "Search Theory and Duration Data: A Theory of Sorts," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 91(1), pages 39-57.
    9. Ross D. Milbourne & Douglas D. Purvis & W. David Scoones, 1991. "Unemployment Insurance and Unemployment Dynamics," Canadian Journal of Economics, Canadian Economics Association, vol. 24(4), pages 804-826, November.
    10. Baker, Michael, 1992. "Digit preference in CPS unemployment data," Economics Letters, Elsevier, vol. 39(1), pages 117-121, May.
    11. Kim B. Clark & Lawrence H. Summers, 1979. "Labor Market Dynamics and Unemployemnt: A Reconsideration," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 10(1), pages 13-72.
    12. Baker, Michael, 1992. "Unemployment Duration: Compositional Effects and Cyclical Variability," American Economic Review, American Economic Association, vol. 82(1), pages 313-321, March.
    13. Card, David & Freeman, Richard B. (ed.), 1993. "Small Differences That Matter," National Bureau of Economic Research Books, University of Chicago Press, number 9780226092836, Febrero.
    14. Sider, Hal, 1985. "Unemployment Duration and Incidence: 1968-82," American Economic Review, American Economic Association, vol. 75(3), pages 461-472, June.
    15. Lancaster, Tony & Chesher, Andrew, 1981. "Stock and flow sampling," Economics Letters, Elsevier, vol. 8(1), pages 63-65.
    16. Jay L. Zagorsky, 1998. "Job Vacancies In The United States: 1923 To 1994," The Review of Economics and Statistics, MIT Press, vol. 80(2), pages 338-345, May.
    17. John McCallum, 1987. "Unemployment in Canada and the United States," Canadian Journal of Economics, Canadian Economics Association, vol. 20(4), pages 802-822, November.
    Full references (including those not matched with items on IDEAS)

    Citations

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


    Cited by:

    1. Cédric Tille, 1998. "Decomposition of the Unemployment Gap between Canada and the United States: Duration or Incidence?," Canadian Public Policy, University of Toronto Press, vol. 24(s1), pages 90-102, February.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Michael Baker & Miles Corak & Andrew Heisz, 1998. "The Labour Market Dynamics of Unemployment Rates in Canada and the United States," Canadian Public Policy, University of Toronto Press, vol. 24(s1), pages 72-89, February.
    2. Manfred Keil & Louis Pantuosco, 1998. "Canadian and US Unemployment Rates: A Comparison Based on Regional Data," Canadian Public Policy, University of Toronto Press, vol. 24(s1), pages 38-55, February.
    3. David Gray & Gilles Grenier, 1998. "Jobless Durations of Displaced Workers: A Comparison of Canada and the United States," Canadian Public Policy, University of Toronto Press, vol. 24(s1), pages 152-169, February.
    4. Krueger, Alan B. & Meyer, Bruce D., 2002. "Labor supply effects of social insurance," Handbook of Public Economics, in: A. J. Auerbach & M. Feldstein (ed.), Handbook of Public Economics, edition 1, volume 4, chapter 33, pages 2327-2392, Elsevier.
    5. Lemieux, Thomas & MacLeod, W. Bentley, 2000. "Supply side hysteresis: the case of the Canadian unemployment insurance system," Journal of Public Economics, Elsevier, vol. 78(1-2), pages 139-170, October.
    6. David Card & W. Craig Riddell, 1993. "A Comparative Analysis of Unemployment in Canada and the United States," NBER Chapters, in: Small Differences That Matter: Labor Markets and Income Maintenance in Canada and the United States, pages 149-190, National Bureau of Economic Research, Inc.
    7. Robert Amano & Tony S. Wirjanto, "undated". "An Empirical Investigation into Government Spending and Private Sector Behaviour," Staff Working Papers 94-8, Bank of Canada.
    8. Denise Côté & Doug Hostland, 1996. "An Econometric Examination of the Trend Unemployment Rate in Canada," Staff Working Papers 96-7, Bank of Canada.
    9. Hassan Bougrine & Mario Seccareccia, 1999. "Unemployment Insurance and Unemployment: An analysis of the aggregate demand-side effects for postwar Canada," International Review of Applied Economics, Taylor & Francis Journals, vol. 13(1), pages 5-21.
    10. Stephen S. Poloz, 1995. "The Causes of Unemployment in Canada: A Review of the Evidence," Macroeconomics 9502002, University Library of Munich, Germany.
    11. Stephen Bazen & Xavier Joutard & Mouhamadou Niang, 2014. "The measurement of unemployment using completed durations: evidence on the gender gap in unemployment in France," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 12(4), pages 517-534, December.
    12. Valletta, Robert G., 2013. "House lock and structural unemployment," Labour Economics, Elsevier, vol. 25(C), pages 86-97.
    13. 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.
    14. Robert G. Valletta, 1998. "Changes in the structure and duration of U.S. unemployment, 1967-1998," Economic Review, Federal Reserve Bank of San Francisco, pages 29-40.
    15. Peter Kuhn & A. Leslie Robb, 1998. "Shifting Skill Demand and the Canada-US Unemployment Gap: Evidence from Prime-Age Men," Canadian Public Policy, University of Toronto Press, vol. 24(s1), pages 170-191, February.
    16. Campolieti, Michele, 2009. "An Analysis of Unemployment Incidence and Duration: Some New Evidence from Canada," CLSSRN working papers clsrn_admin-2009-14, Vancouver School of Economics, revised 02 Feb 2009.
    17. Stephen S. Poloz, "undated". "The Causes of Unemployment in Canada: A Review of the Evidence," Staff Working Papers 94-11, Bank of Canada.
    18. Stephen R. G. Jones & Craig Riddell, 2000. "The Dynamics of US Labor Force Attachment," Econometric Society World Congress 2000 Contributed Papers 0011, Econometric Society.
    19. Jochen Mankart & Rigas Oikonomou, 2017. "Household Search and the Aggregate Labour Market," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 84(4), pages 1735-1788.
    20. John F. Helliwell, 2001. "Canada: Life beyond the Looking Glass," Journal of Economic Perspectives, American Economic Association, vol. 15(1), pages 107-124, Winter.

    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:stc:stcp3e:1997097e. 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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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: Mark Brown (email available below). General contact details of provider: https://edirc.repec.org/data/stagvca.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.