The ins and outs of unemployment in Canada, 1976‐2008

This paper studies the flows into and out of unemployment in Canada at an aggregate and a number of disaggregated levels. I find that inflows into unemployment are countercyclical and outflows are procyclical. At an aggregate level, changes in the rate at which individuals leave unemployment account for most of the changes in unemployment rates in Canada between 1976 and 2008. However, flows into unemployment matter more at some disaggregated levels. There are also some differences in the contributions of flows into and out of unemployment to changes in unemployment rates across the 1981–82 and 1990–92 recessions.