TY  - JOUR
AU  - Hoffmann, Florian
AU  - Lemieux, Thomas
TI  - Unemployment in the Great Recession: A Comparison of Germany, Canada and the United States
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 20694
PY  - 2014
Y2  - November 2014
DO  - 10.3386/w20694
UR  - http://www.nber.org/papers/w20694
L1  - http://www.nber.org/papers/w20694.pdf
N1  - Author contact info:
Florian Hoffmann
Vancouver School of Economics
University of British Columbia
#997-1873 East Mall
Vancouver, BC V6T 1Z1
CANADA
E-Mail: florian.hoffmann@ubc.ca

Thomas Lemieux
Vancouver School of Economics
University of British Columbia
6000 Iona Drive
Vancouver, BC V6T 1L4
CANADA
E-Mail: thomas.lemieux@ubc.ca
M1  - published as Florian Hoffmann, Thomas Lemieux. "Unemployment in the Great Recession: A Comparison of Germany, Canada, and the United States," in David Card and Alexandre Mas, organizers, "Labor Markets in the Aftermath of the Great Recession" Journal of Labor Economics, Volume 34, Number S1, part 2 (2016)

AB  - This paper investigates the potential reasons for the surprisingly different labor market performance of the United States, Canada, Germany, and several other OECD countries during and after the Great Recession of 2008-09.  Unemployment rates did not change substantially in Germany, increased and remained at relatively high levels in the United States, and increased moderately in Canada. More recent data also show that, unlike Germany and Canada, the U.S. unemployment rate remains largely above its pre-recession level. We find two main explanations for these differences. First, the large employment swings in the construction sector linked to the boom and bust in U.S. housing markets can account for a large fraction of the cross-country differences in aggregate labor market outcomes for the three countries. Second, cross-country differences are consistent with a conventional Okun relationship linking GDP growth to employment performance. In particular, relative to pre-recession trends there has been a much larger drop in GDP in the United States than Germany between 2008 and 2012. In light of these facts, the strong performance of the German labor market is consistent with other aggregate outcomes of the economy.
ER  -