Labour markets
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August 15, 2000
Restructuring in the Canadian Economy: A Survey of Firms
Towards the end of the 1980s and into the early 1990s, the Canadian economy experienced a number of structural changes. These included free trade agreements (both the FTA and NAFTA), significant technological advances, deregulation in many sectors of the economy, the arrival of large, U.S.-based retailers, and the introduction of the GST. -
Employment Effects Of Nominal-Wage Rigidity: An Examination Using Wage-Settlements Data
The argument advocating a moderate level of inflation based on the downward nominal-wage rigidity (DNWR) hypothesis rests on three factors: its presence, extent, and negative impact in the labour market. This paper focuses on the employment effect of DNWR. -
The Employment Costs of Downward Nominal-Wage Rigidity
In this paper, we use firm-level wage and employment data to address whether there is evidence of downward nominal-wage rigidity, and whether that rigidity is associated with a reduction in employment. We describe an estimation bias that can result when estimating reduced-form wage and employment equations and suggest a way of controlling for that bias. […] -
Dynamic Employment and Hours Effects of Government Spending Shocks
In this paper, we analyze the dynamic behaviour of employment and hours worked per worker in a stochastic general equilibrium model with a matching mechanism between vacancies and unemployed workers. The model is estimated for the United States using the Generalized Methods of Moments (GMM) estimation technique. An increase in government spending raises hours worked […] -
Can a Matching Model Explain the Long-Run Increase in Canada's Unemployment Rate?
The authors construct a simple general equilibrium model of unemployment and calibrate it to the Canadian economy. Job creation and destruction are endogenous. In this model, they consider several potential factors that could contribute to the long-run increase in the Canadian unempoloyment rate: a more generous unemployment insurance system, higher layoff costs, higher discretionary taxes, […] -
August 13, 1998
Labour force participation in Canada: Trends and shifts
A key determinant of the potential growth of an economy is the rate at which the labour force increases, which depends both on population growth and on changes in the participation rate. Cyclical factors related to the economic environment can play a significant role in affecting the participation rate, as can structural factors and demographic trends. From the mid-1970s to the end of the 1980s, the participation rate rose almost without interruption to a record high of 67.5 per cent. In contrast, between 1990 and 1995, it declined sharply and has been relatively steady at around 65 per cent since 1995. In this article, the author analyzes the participation rate of age and gender groupings in order to better understand the factors leading to these developments and their implications for future movements in the aggregate rate. While cyclical factors contributed to the decline in the participation rate in the 1990s, structural factors (such as an increase in school attendance rates and the increasing use of computer technology) and demographic trends (the aging of the population) have had a substantial impact. The conclusion reached is that, while some recovery is to be expected, the aggregate participation rate is unlikely to return to its 1989 peak over the next decade or so. -
Les marchés du travail régionaux : une comparaison entre le Canada et les États-Unis
The purpose of this study is to compare the behaviour of regional labour markets in Canada and the United States. The study shows that the degree of persistence of unemployment is significantly higher in the provinces of Canada than it is in the various American regions. -
A Micro Approach to the Issue of Hysteresis in Unemployment: Evidence from the 19881990 Labour Market Activity Survey
This paper uses a rich set of microeconomic labour market data—the 198890 Labour Market Activity Survey published by Statistics Canada—to test whether there is negative duration dependence in unemployment spells. It updates and extends similar work carried out by Jones (1995) who used the 198687 Labour Market Activity Survey. -
An Econometric Examination of the Trend Unemployment Rate in Canada
This paper attempts to identify the trend unemployment rate, an empirical concept, using cointegration theory. The authors examine whether there is a cointegrating relationship between the observed unemployment rate and various structural factors, focussing neither on the non-accelerating-inflation rate of unemployment (NAIRU) nor on the natural rate of unemployment, but rather on the trend unemployment rate, which they define in terms of cointegration.