AN EMPIRICAL-MODEL OF SECTORAL MOVEMENTS BY UNEMPLOYED WORKERS

Using Canadian data, I investigate the relationships among sectoral mo bility, unemployment spells, and total unemployment. Recent North Amer ican evidence suggests that incidence shifts toward high wage-high ten ure workers may increase equilibrium unemployment through decreasing s ectoral mobility and increasing spells. Using a multiple spell transit ion model, I find that, while shifts toward such workers may have thes e effects, composition changes that lead to higher mobility can also i ncrease unemployment. A further investigation into the relative roles of mobility and spell lengths in driving total unemployment indicates that the influence of the former is comparatively small.