We anticipate our independent variables will have the following effects on PRs and SERs:
A priori, the cyclical net effect is indeterminate; the discouraged and added worker effects co-exist.
The effect of the average real wage and relative minimum wage is indeterminate, a function of the income effect and substitution effect.
Employment/unemployment insurance should have a positive effect on PR and a negative effect on SER.
Social assistance should have a negative effect on PR and an indeterminate effect on SER because the rules are different from one province to another.
The rate of return to education should have a positive effect on SER.