GROSS FLOWS OF LABOR IN CANADA AND THE UNITED-STATES

We employ data on gross flows of labour to provide a comparative analy sis of labour market behaviour in Canada and the US in 1976-94. Althou gh the relative rise in Canadian unemployment is partly associated wit h relative changes in the transition probabilities between Unemploymen t and Employment (in both directions), the rise is more closely associ ated 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 1 980s may have played a sizeable role in the emergence of the unemploym ent rate gap.