Gross flows of labour in Canada and the United States

We employ data on gross flows of labour to provide a comparative analysis of labour market behaviour in Canada and the US in 1976-94. Although the relative rise in Canadian unemployment is partly associated with relative changes in the transition probabilities between Unemployment and Employment (in both directions), the rise is more closely associated with movements between the two nonemployment states, Unemployment and Not-in-the-Labour-Force. A simulation suggests that the relative increase in Canadian 'labour force attachment' starting in the early 1980s may have played a sizeable role in the emergence of the unemployment rate gap.