Endogeneity in Structural Unemployment Equations : The Case of Canada.

This paper examines the endogeneity of several structural variables which enter unemployment rate equations-the generosity of unemployment benefits, nonwage labor costs, the relative minimum wage, and the degree of unionization. It finds evidence of reverse causality for these structural variables b...

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Detalles Bibliográficos
Autor Corporativo: International Monetary Fund
Formato: Revista
Lenguaje:English
Publicado: Washington, D.C. : International Monetary Fund, 1993.
Colección:IMF Working Papers; Working Paper ; No. 1993/094
Acceso en línea:Full text available on IMF
Descripción
Sumario:This paper examines the endogeneity of several structural variables which enter unemployment rate equations-the generosity of unemployment benefits, nonwage labor costs, the relative minimum wage, and the degree of unionization. It finds evidence of reverse causality for these structural variables based on causality tests. The structural unemployment rate equation is then estimated using instruments suggested by the empirical analysis of the structural variables. The paper confirms the earlier finding that the generosity of unemployment benefits, nonwage labor costs, and the relative minimum wage have a significant positive impact on the unemployment rate, but fails to find an effect for the degree of unionization.
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Descripción Física:1 online resource (30 pages)
Formato:Mode of access: Internet
ISSN:1018-5941
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