The Sources of Unemployment in Canada, 1967-91: Evidence from a Panel of Regions and Demographic Groups.

We analyze the determinants of Canadian unemployment in a framework incorporating demand and supply-side variables: the interest rate, taxation, foreign activity, minimum wages, union density, demographic pressure, unemployment insurance, terms of trade. The model is estimated with 500 observations for five Canadian regions and four demographic groups, 1967-91. We provide a comprehensive picture of the macroeconomic and structural causes of unemployment with data combining the advantages of macroeconomic time series and microeconomic cross sections. The long-term rise in Canadian unemployment since 1960 is attributed to higher real interest rates, the UI reform of 1972, and slightly adverse net demographic pressure. Copyright 2001 by Oxford University Press.