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Unemployment Invariance Hypothesis, Added and Discouraged Worker Effects in Canada?

Author

Listed:
  • Aysit Tansel

    (Department of Economics, Middle East Technical University, Ankara, Turkey; Institute for the Study of Labor (IZA) Bonn, Germany; Economic Research Forum (ERF) Cairo, Egypt)

  • Zeynel Abidin Ozdemir

    (Department of Economics, Gazi University, Besevler, 06500, Ankara, Turkey Economic Research Form (ERF), Cairo, Egypt)

Abstract
This article explores the long-run relationship between unemployment rate and labor force participation rate for men and women in Canada. The co-integration analysis vindicates the existence of a long-run relationship between these two variables. This finding leads us to doubt the pertinence of the unemployment invariance hypothesis for Canada. This is consistent with the empirical studies for Japan, Sweden and the United States, but contradicts the empirical studies for Australia, Romania and Turkey. Further, we find discouraged worker effect for women and added worker effect for men and we elaborate on the possible explanations for this seemingly contradictory finding.

Suggested Citation

  • Aysit Tansel & Zeynel Abidin Ozdemir, 2016. "Unemployment Invariance Hypothesis, Added and Discouraged Worker Effects in Canada?," ERC Working Papers 1717, ERC - Economic Research Center, Middle East Technical University, revised Dec 2017.
    • Handle: RePEc:met:wpaper:1717
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    References listed on IDEAS

    as
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    Full references (including those not matched with items on IDEAS)

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    Cited by:

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    2. Lassassi, Moundir & Tansel, Aysit, 2020. "Female Labor Force Participation in Five Selected MENA Countries: An Age-Period-Cohort Analysis (Algeria, Egypt, Jordan, Palestine and Tunisia)," GLO Discussion Paper Series 693, Global Labor Organization (GLO).
    3. Liviu Toader & Dorel Paraschiv & Vasile Dinu & Daniela Manea & Mihaela Mihai, 2023. "The effects of private sector companies’ research and development investments on the adoption of cloud computing services in the European Union," E&M Economics and Management, Technical University of Liberec, Faculty of Economics, vol. 26(2), pages 189-202, June.
    4. Moundir Lassassi & Aysit Tansel, 2020. "Female labor force participation in five selected MENA countries: An age-period-cohort analysis," Koç University-TUSIAD Economic Research Forum Working Papers 2018, Koc University-TUSIAD Economic Research Forum.
    5. Martín-Román, Ángel L., 2022. "Beyond the added-worker and the discouraged-worker effects: the entitled-worker effect," Economic Modelling, Elsevier, vol. 110(C).
    6. Congregado, Emilio & Gałecka-Burdziak, Ewa & Golpe, Antonio A. & Pater, Robert, 2021. "Unemployment invariance hypothesis and structural breaks in Poland," The Journal of Economic Asymmetries, Elsevier, vol. 24(C).
    7. Walter Paternesi Meloni & Antonella Stirati, 2023. "The decoupling between labour compensation and productivity in high‐income countries: Why is the nexus broken?," British Journal of Industrial Relations, London School of Economics, vol. 61(2), pages 425-463, June.
    8. Yue Yin & Ye Jiang, 2023. "Fertility Effects of Labor Market Conditions at Graduation," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 31(4), pages 120-152, July.

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    More about this item

    Keywords

    Unemployment Invariance; Unemployment; Labor Force Participation; Discouraged Worker Effect; Added Worker Effect; Co-integration; Canada;
    All these keywords.

    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
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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