FACTORS THAT AFFECT UNEMPLOYMENT RATE IN CANADA By: Nicole Abbiento & Heinrich LaMontange

 This statistics project is designed in order to figure out what factors effect the unemployment rate in Canada as well as how influential these factors are toward the unemployment rate.  We decided to choose this topic because we are both interested in pursuing business in our futures.  Unemployment rate is a huge issue in Canada, especially after the recession in  Currently, students coming out of a post secondary education are facing the worst job market in 35 years with only a 60 percent success rate.  Also, amoung youth aged the unemployment rate rose to 14.8 percent in Canada. INTRODUCTION

 What causes the unemployment rate to raise or decrease?  What is the relationship between inflation and unemployment rate?  What is the relationship between interest rates and unemployment?  What is the relationship between GDP and unemployment? QUESTIONS TO BE ANSWERED

We predict the unemployment rate will…  Increase with a rise in interest rates.  Increase with a rise in inflation.  Decrease with rise in GDP. HYPOTHESES

VariableManipulatedDiscrete or Continuous Qualitative or Quantitative Independent or Dependent Unemployment Rate (%) Yes, outliers were removed ContinuousQuantitativeDependent Interest Rate (%)Yes, outliers were removed ContinuousQuantitativeIndependent GDP (%)NoContinuousQuantitativeIndependent Inflation (%)Yes, outliers were removed ContinuousQuantitativeIndependent VARIABLES

UNEMPLOYMENT VS INTEREST RATES R = 0.41 Moderate Positive Correlation If the unemployment rate rose to 12% interest rates should be at 16.28% (extrapolation) Common-Cause Factor

UNEMPLOYMENT VS GDP R = 0.73 Strong Negative Correlation If the unemployment rate rose to 12% GDP should be at % (extrapolation) Common-Cause Factor

UNEMPLOYMENT VS INFLATION R = 0.49 Moderate Negative Correlation If the unemployment rate rose to 12% inflation should be at % (extrapolation) Common-Cause Factor

UNEMPLOYMENT RATE IN DIFFERENT COUNTRIES

STANDARD DEVIATION Canada: Standard Deviation: 0.91 Variance: 0.82 Q1: 6.3 Q2: 7.2 Q3: 7.6 IQR: 1.3 Outliers: No outliers Spain: Standard Deviation: 4.37 Variance: Q1: 9.2 Q2: 11.3 Q3: 16 IQR: 6.8 Outliers: No outliers Least consistent Switzerland: Standard Deviation: 0.66 Variance: 0.44 Q1: 2.6 Q2: 3.1 Q3: 3.7 IQR: 1.1 Outliers: No outliers Most consistent

MEASURES OF CENTRAL TENDENCY Mean: 2.18% Median: 5.8% Mode: 5.8%, 6.1%

MEASURES OF CENTRAL TENDENCY Mean: 2.32% Median: 2.46% Mode: No Mode

After completing this project we found that the unemployment rate…  Increased with a rise in interest rates.  Decreased with a rise in inflation.  Decreased with rise in GDP. Two of our predictions were correct, the unemployment rate increased with a rise in interest rates and decreased with a rise in GDP. However, the unemployment rate also decreased with a rise in inflation which we did not expect. CONCLUSION

 A bias could have arisen throughout this study due to the fact that the government needs to inflate the employment rate to make it seem like their monetary policy is working.  The government doesn’t account for those on disability insurance or those that have given up on looking for a job in the workforce.  If these people were accounted for, the unemployment rate would be a lot higher than it is.  This could fall under a response bias because the government is manipulating the information to attain the result they want which is not a true reflection of actually unemployment rate.  By making the unemployment rate look better than it actually is the government is creating false hope for the residents of Canada. BIAS

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