Predicting Long-Term Unemployment in Canada: Prospects and Policy Implications

The problem of long-term unemployment—jobless but seeking work for 12 months or more—was persistent throughout the 1980s and 1990s in all 30 member countries of the Organisation for Economic Co-operation and Development (OECD). However, the extent of the problem differed greatly among countries. In Canada, Norway, Sweden, and the United States, the proportion of unemployed who were long-term unemployed (LTU) was relatively low, ranging from 9.5 percent in the United States to 17.1 percent in Sweden in 1996. This compares with 30.7 percent on average in the G7 countries, 34 percent on average for the 30 OECD countries, and 49.3 percent for the 15 members of the European Union (Organisation for Economic Co-operation and Development 1998b, 1998c). Nevertheless, these lower rates in North America and northern Europe represent significant increases over rates observed a decade earlier. Targeting of reemployment services to the LTU became part of national employment policy in both the United States and Australia during the 1990s (Organisation for Economic Co-operation and Development 1998a). In the United States, the Worker Profiling and Reemployment Services (WPRS) system, established by 1993 legislation, required early identification and referral to services of unemployment compensation beneficiaries who are predicted as likely to be LTU. In Australia, a formal early identification and intervention strategy was devised and implemented by the Commonwealth Employment Service