Regional Convergence and the Role of Federal Transfers in Canada

14 Pages Posted: 29 Jan 2006

See all articles by Martin Kaufman

Martin Kaufman

International Monetary Fund (IMF) - Western Hemisphere Department

Steven Dunaway

International Monetary Fund (IMF) - Western Hemisphere Department

Phillip Swagel

Northwestern University - Department of Economics; International Monetary Fund (IMF)

Date Written: May 2003

Abstract

Differences in per capita output across Canadian provinces have narrowed less than disparities in per capita income in past decades. Using a panel regression framework, this paper studies the differential impact of federal transfer programs on output convergence. The evidence suggests that while the Employment Insurance (EI) system seems to have had a significant negative effect on output convergence - by discouraging migration within Canada - the Equalization transfers may have helped spur convergence. The EI system, despite reforms introduced in the 1990s, still appears to contain features that deter labor mobility.

Keywords: Canada, regional convergence, federal transfers, migration

JEL Classification: R12, R23, H59

Suggested Citation

Kaufman, Martin and Dunaway, Steven and Swagel, Phillip, Regional Convergence and the Role of Federal Transfers in Canada (May 2003). IMF Working Paper, Vol. , pp. 1-14, 2003. Available at SSRN: https://ssrn.com/abstract=879173

Martin Kaufman (Contact Author)

International Monetary Fund (IMF) - Western Hemisphere Department ( email )

700 19th Street NW
Washington, DC 20431
United States

Steven Dunaway

International Monetary Fund (IMF) - Western Hemisphere Department ( email )

700 19th Street NW
Washington, DC 20431
United States

Phillip Swagel

Northwestern University - Department of Economics ( email )

2003 Sheridan Road
Evanston, IL 60208
United States
(847) 491-8219 (Phone)

International Monetary Fund (IMF) ( email )

700 19th Street NW
IMF Room 10-612F
Washington, DC 20431
United States
(202) 623-7301 (Phone)
(202) 623-6343 (Fax)

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