Understanding the factors that determine the migration of labour between regions is crucial for assessing the economy’s response to macroeconomic shocks and identifying policies that will encourage an efficient reallocation of labour. By examining the determinants of migration within Canada from 1991 to 2006, this article provides evidence that regional differences in employment rates and household incomes tend to increase labour migration, and that provincial borders and language differences are barriers to migration.
Topics: Econometric and statistical methods; Labour markets; Regional economic developmentsThe Bank of Canada conducted a Wage Setting Survey with a sample of 200 private sector firms from mid-October 2007 to May 2008. Results indicate that wage adjustments for the Canadian non-union private workforce are overwhelmingly time dependent, with a fixed duration of one year, and are clustered in the first four months of the year, suggesting that wage stickiness may not be constant over the year.
Topics: Labour markets; Transmission of monetary policyUsing census data at the economic region level from 1991 to 2006 and a gravity model framework, this paper examines the factors that influence migration within Canada.
Topics: Econometric and statistical methods; Labour markets; Regional economic developmentsWhat are the effects of financial market imperfections on unemployment and vacancies in Canada? The author estimates the model of Zhang (2011) – a standard monetary dynamic stochastic general-equilibrium model augmented with explicit financial and labour market frictions – with Canadian data for the period 1984Q2–2010Q4, and uses it to examine the importance of financial shocks on labour market fluctuations in Canada.
Topics: Economic models; Financial markets; Labour marketsThis paper constructs a theory of the coexistence of fixed-term and permanent employment contracts in an environment with ex-ante identical workers and employers. Workers under fixed-term contracts can be dismissed at no cost while permanent employees enjoy labor protection.
Topics: Labour markets; Potential output; ProductivityWhat are the effects of financial market imperfections on unemployment and vacancies? Since standard DSGE models do not typically model unemployment, they abstract from this issue.
Topics: Economic models; Financial markets; Labour marketsFrom 1980 until 2007, U.S. average hours worked increased by thirteen percent, due to a large increase in female hours. At the same time, the U.S. labor wedge, measured as the discrepancy between a representative household's marginal rate of substitution between consumption and leisure and the marginal product of labor, declined substantially.
Topics: Economic models; Labour markets; Potential outputIn Canada, temporary workers account for 14 per cent of jobs in the non-farm business sector, are present in a range of industries, and account for 40 per cent of the total job reallocation. Yet most models of job reallocation abstract from temporary workers.
Topics: Labour markets; ProductivityIn recent years, the Canadian economy has been affected by strong movements in relative prices brought about by the surging costs of energy and non-energy commodities, with significant implications for the terms of trade, the exchange rate, and the allocation of resources across Canadian sectors and regions.
Topics: Labour markets; Productivity; Recent economic and financial developmentsThis article investigates the stability of Okun's law for Canada and the United States using a time varying parameter approach. Time variation is modeled as driftless random walks and is estimated using the median unbiased estimator approach developed by Stock and Watson (1998).
Topics: Business fluctuations and cycles; Labour marketsThis paper documents the rate at which labour flows between industries and between firms within industries using the most recent data available. It examines the determinants of these flows and their relationship with the productivity growth.
Topics: Inflation and prices; Labour markets; ProductivityReal wage rigidities have recently been proposed as a way of building intrinsic persistence in inflation within the context of New Keynesian Phillips Curves. Using two recent illustrative structural models, we evaluate empirically the importance of real wage rigidities in the data and the extent to which such models provide useful information regarding price stickiness.
Topics: Econometric and statistical methods; Inflation and prices; Labour marketsThe number of job gains and losses across firms in Canada each year is roughly one-fifth the total number of jobs and generally occurs within sectors (industries) rather than across sectors. Since labour reallocation within sectors has been strongly related to productivity growth in Canada, defining the key drivers of this type of reallocation is important, given the higher rates of reallocation and productivity growth in the Untied States than in Canada. This article finds that the appreciation of the Canadian dollar and rising commodity prices led to above-average reallocation of labour across sectors over the 2005-08 period, but that the impact on productivity has been minor. Labour reallocation across firms, however, generates substantial labour productivity gains in manufacturing and the business sector as a whole.
Topics: Labour markets; ProductivityIn continental Europe, labour shares in national income have exhibited considerable variation since 1970. Empirical and theoretical research suggests that the evolution of labour markets and labour market imperfections can, in part, explain this phenomenon.
Topics: Economic models; Financial Institutions; Labour marketsThis paper analyzes the differences in wage ratios of university graduates to less than university graduates, the education premium, in Canada and the United States from 1980 to 2000. Both countries experienced a similar increase in the fraction of university graduates and a similar increase in skill biased technological change based on capital-embodied technological progress, but only the United States had a large increase in the education premium.
Topics: Labour markets; ProductivityWhy do employed persons in large firms earn more than employed persons in small firms, even after controlling for observable characteristics? Complementary to previous results, this paper proposes a mechanism that gives an answer to this question.
Topics: Economic models; Labour markets; ProductivityOffshoring has become an increasingly prominent aspect of the globalization process. Evidence over the past two decades suggests that offshoring has not exerted a noticeable impact on overall employment and earnings growth in advanced economies, but it has likely contributed to shifting the demand for labour towards higher-skilled jobs. There appear to be some positive effects of offshoring on productivity, but such effects differ by country.
Topics: International topics; Labour markets; ProductivityAccording to the rent-extraction hypothesis, weak corporate governance allows entrenched CEOs to capture the pay-setting process and benefit from events outside of their control – get paid for luck. In this paper, I find that the independence requirement imposed on boards of directors by the Sarbanes-Oxley Act of 2002 (SOX), together with the governance regulations [...]
Topics: Labour marketsThis paper analyses the Canadian economy for the post 1960 period. It uses an accounting procedure developed in Chari, Kehoe, and McGrattan (2006). The procedure identifies accounting factors that help align the predictions of the neoclassical growth model with macroeconomic variables observed in the data.
Topics: Labour markets; Potential output; ProductivityWhile demographic change has been an ongoing process in Canada, labour market implications of an aging population will become more acute in coming years. This article discusses the anticipated slowing in the growth of trend labour input over the coming decades with the aging of the baby boomers, declining fertility rates, and the stabilization of the labour force attachment of women. As the pool of labour shrinks, employers and governments will be looking for ways to address barriers to continued labour force participation and firms will have a greater incentive to find ways of improving labour productivity.
Topics: Economic models; Labour markets; Potential outputThis paper provides an analysis of how a firm’s decision to serve a foreign market by exporting or by engaging in foreign direct investment (FDI) affects firm productivity, when productivity is endogeneous as a function of training. The main result of our paper is that, with endogeneous productivity, exporting results in lower productivity than does FDI, but exporting may result in higher or lower employment and output than does FDI.
Topics: International topics; Labour markets; ProductivityThis paper asks: What is the effect of government policy on output and inequality in an environment with education and labor-supply decisions? The answer is given in a general equilibrium model, consistent with the post 1960s facts on male wage inequality and labor supply in the U.S. In the model, education and labor-supply decisions depend on progressive income taxation, the education system, the social security system, and technology-driven wage differentials.
Topics: Labour markets; Potential output; ProductivityThe author quantitatively studies the interaction between education and occupation choices and its implication for the relationship between the changes in earnings inequality and the changes in wealth inequality in the United States over the 1983–2001 period.
Topics: Economic models; Labour marketsFrom 1870 to 2000, the workweek length of employed persons decreased by 41 per cent in industrialized countries.
Topics: Economic models; Labour markets; ProductivityThe hypothesis of intertemporal substitution in labour supply has a history of empirical failure when confronted with aggregate time-series data.
Topics: Business fluctuations and cycles; Econometric and statistical methods; Labour markets
