Potential output

• June 17, 2007

  Trend Labour Supply in Canada: Implications of Demographic Shifts and the Increasing Labour Force Attachment of Women

  Bank of Canada Review - Summer 2007 Russell Barnett

  While 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.

  Content Type(s): Publications, Bank of Canada Review Article Topic(s): Economic models, Labour markets, Potential output

• Schooling, Inequality and Government Policy

  Staff Working Paper 2007-12 Oleksiy Kryvtsov, Alexander Ueberfeldt

  This 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.

  Content Type(s): Staff Research, Staff Working Papers Topic(s): Labour markets, Potential output, Productivity JEL Code(s): H, H5, H52, J, J3, J31, J38