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Unemployment and confidence in Canada: Evidence from national and regional level data

Wei-fong Pan ()
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Wei-fong Pan: Research Institute, First Capital Securities Co., Ltd.

Economics Bulletin, 2018, vol. 38, issue 2, 1111-1123

Abstract: This study investigates the relationship between unemployment and confidence in Canada, using both panel data, which considers cross-sectional dependence and heterogeneity among the regions, and time series causality tests. A unidirectional causal relationship from confidence to unemployment, including total, male, female, long-term, and youth unemployment, is found. This indicates that confidence can predict unemployment. The results further highlight the importance of considering regional differences and cross-sectional dependence when performing the analysis. Moreover, improving confidence would help ameliorate the unemployment problem at the aggregate level and for specific groups, such as youth and females, and reduce the duration of unemployment.

Keywords: regional unemployment; confidence; youth unemployment; animal spirits (search for similar items in EconPapers)
JEL-codes: J6 R1 (search for similar items in EconPapers)
Date: 2018-06-03
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