Does the Unemployment Invariance Hypothesis Hold for Canada?

10 Pages Posted: 6 Sep 2016 Last revised: 16 Apr 2023

See all articles by Aysit Tansel

Aysit Tansel

Middle East Technical University (METU) - Department of Economics; IZA Institute of Labor Economics; Economic Research Forum (ERF)

Zeynel Abidin Ozdemir

Economic Research Forum (ERF); IZA Institute of Labor Economics

Emre Aksoy

Kirikkale University

Abstract

This article explores the long-run relationship between unemployment rate and labor force participation rate in Canada. The cointegration 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. There are contradictory studies for the United Kingdom.

Keywords: cointegration, Canada, unemployment, labor force participation, unemployment invariance hypothesis

JEL Classification: E24, J64, J21

Suggested Citation

Tansel, Aysit and Ozdemir, Zeynel Abidin and Aksoy, Emre, Does the Unemployment Invariance Hypothesis Hold for Canada?. IZA Discussion Paper No. 10178, Available at SSRN: https://ssrn.com/abstract=2834228 or http://dx.doi.org/10.2139/ssrn.2834228

Aysit Tansel (Contact Author)

Middle East Technical University (METU) - Department of Economics ( email )

Inonu Bulvari
Ankara 06800
Turkey
90 312 210 2073 (Phone)
90 312 210 7964 (Fax)

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Economic Research Forum (ERF) ( email )

21 Al-Sad Al-Aaly St.
(P.O. Box: 12311)
Dokki, Cairo
Egypt

Zeynel Abidin Ozdemir

Economic Research Forum (ERF) ( email )

21 Al-Sad Al-Aaly St.
(P.O. Box: 12311)
Dokki, Cairo
Egypt

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

Emre Aksoy

Kirikkale University ( email )

Kirikkale
Turkey

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