The paepr reviews different reasons for the emergence in the 1980s of an unemployment gap between Canada and the U.S. We develop a small equilibrium model ofthe Canadian labor market to quantify and evaluate these reasons. We conclude that the gap is essentially due to the liberalization of the...

This paper sets out to explain the Canadian-US unemployment rate gap that has persisted since 1982. The gap, which appeared in two stages, has lasted through peaks and troughs in economic activity. We use a panel of five Canadian and nine US regions to search for the causes. The 1971...