E24 - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital
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Heterogeneity and Monetary Policy: A Thematic Review
The theory that rich economic diversity of businesses and households both affects and is shaped by economy-wide fluctuations has strong implications for monetary policy. This review places these insights in a Canadian context. -
Job Applications and Labour Market Flows
Although the number of job applications has risen, job-finding rates remain relatively unchanged while job-separation rates have significantly declined. Rather than raising the probability of finding a job, we find that a rise in applications raises the probability of finding a good match, as evidenced by the decline in separation rates. -
Assessing Labour Market Slack for Monetary Policy
Measuring labour market slack is essential for central banks: without full employment in the economy, inflation will not stay close to target. We propose a comprehensive approach to assessing labour market slack that reflects the complexity and diversity of the labour market. -
Canadian job postings in digital sectors during COVID-19
Digital technologies have helped maintain economic activity while allowing people to remain physically distant throughout the COVID-19 crisis. This note shows that the number of online postings for jobs related to the production of digital technologies in Canada decreased less than the number for other jobs and recovered more quickly after lockdowns were lifted. -
Four Decades of Canadian Earnings Inequality and Dynamics Across Workers and Firms
We use four decades of Canadian matched employer-employee data to explore how inequality and the dynamics of individual earnings have evolved over time in Canada. We also examine how the earnings growth of individuals is related to the growth of their employers. -
Potential output and the neutral rate in Canada: 2021 update
We expect potential output growth to be higher than in the October 2020 reassessment. By 2024, growth will be slightly above its average growth from 2010 to 2019. We assess that the Canadian nominal neutral rate continues to lie in the range of 1.75 to 2.75 percent. -
Labor Demand Response to Labor Supply Incentives: Lessons from the German Mini-Job Reform
How do firms change their employment decisions when tax benefits for low-earning workers are expanded? Some firms increase employment overall, whereas others replace high-earning workers with low-earning workers, according to German linked employer-employee data. -
Labor Market Policies During an Epidemic
We study the labour market and welfare effects of expanding unemployment insurance benefits and introducing payroll subsidies during the COVID-19 pandemic. We find that both policies are complementary and are beneficial to different types of workers. Payroll subsidies preserve the employment of workers in highly productive jobs, while unemployment insurance replaces lost income for workers who experience inevitable job loss. -
Towards a HANK Model for Canada: Estimating a Canadian Income Process
How might one simulate a million realistic income paths and compute their statistical moments in under a second? Using CUDA-based methods to estimate the Canadian earnings process, I find that the distribution of labour income growth is sharply peaked with heavy tails—similar to that in the United States.