Canada’s Beveridge curve and the outlook for the labour market Staff Analytical Note 2022-18 Alexander Lam Canada’s labour market is tight but beginning to ease. Unemployment will likely rise in turn, but the economy can avoid a recessionary surge given current conditions. Higher unemployment would nonetheless be material, especially for those directly impacted. Content Type(s): Staff research, Staff analytical notes Topic(s): Business fluctuations and cycles, Central bank research, Labour markets, Recent economic and financial developments JEL Code(s): E, E3, E32, J, J2, J20, J6, J63, J64
Has wage setting changed in Canada? Evidence from the pre-pandemic 2020 Wage-Setting Survey Staff Analytical Note 2022-10 David Amirault, Sarah Miller, Matthieu Verstraete Just before the pandemic began, the Bank of Canada conducted the 2020 Wage-Setting Survey. The goal was to explore the unusual trend of subdued wage growth in 2018 and 2019 despite a tightening in the labour market. Although this wage puzzle was beginning to resolve at the time of the survey, results highlight changes in several factors that may have important impacts on wage dynamics. Content Type(s): Staff research, Staff analytical notes Topic(s): Central bank research, Labour markets JEL Code(s): J, J3, J31, J32, J33, J6, J63
Benchmarks for assessing labour market health Staff Analytical Note 2022-2 Erik Ens, Corinne Luu, Kurt See, Shu Lin Wee We propose a range of benchmarks for assessing labour market strength for monetary policy. This work builds on a previous framework that considers how diverse and segmented the labour market is. We apply these benchmarks to the Canadian labour market and find that it has more than recovered from the COVID-19 shock. Content Type(s): Staff research, Staff analytical notes Topic(s): Business fluctuations and cycles, Coronavirus disease (COVID-19), Econometric and statistical methods, Labour markets, Monetary policy JEL Code(s): E, E2, E24, J, J2, J21, J6
Job Applications and Labour Market Flows Staff Working Paper 2021-49 Serdar Birinci, Kurt See, Shu Lin Wee 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. Content Type(s): Staff research, Staff working papers Topic(s): Labour markets, Productivity JEL Code(s): E, E2, E24, J, J6, J63, J64
Assessing Labour Market Slack for Monetary Policy Staff Discussion Paper 2021-15 Erik Ens, Laurence Savoie-Chabot, Kurt See, Shu Lin Wee 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. Content Type(s): Staff research, Staff discussion papers Topic(s): Business fluctuations and cycles, Coronavirus disease (COVID-19), Econometric and statistical methods, Labour markets, Monetary policy JEL Code(s): E, E2, E24, J, J2, J21, J6
Canadian job postings in digital sectors during COVID-19 Staff Analytical Note 2021-18 Alejandra Bellatin, Gabriela Galassi 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. Content Type(s): Staff research, Staff analytical notes Topic(s): Coronavirus disease (COVID-19), Labour markets JEL Code(s): E, E2, E24, J, J2, J23, J6, J63, J64, O, O3, O33
Four Decades of Canadian Earnings Inequality and Dynamics Across Workers and Firms Staff Working Paper 2021-20 Audra Bowlus, Émilien Gouin-Bonenfant, Huju Liu, Lance Lochner, Youngmin Park 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. Content Type(s): Staff research, Staff working papers Topic(s): Econometric and statistical methods, Firm dynamics, Labour markets, Potential output, Productivity JEL Code(s): D, D2, D22, D3, D31, E, E2, E24, J, J2, J24, J3, J31, J6, J63
Labor Market Policies During an Epidemic Staff Working Paper 2020-54 Serdar Birinci, Fatih Karahan, Yusuf Mercan, Kurt See 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. Content Type(s): Staff research, Staff working papers Topic(s): Business fluctuations and cycles, Coronavirus disease (COVID-19), Fiscal policy, Labour markets JEL Code(s): E, E2, E24, E6, E62, J, J6, J64
How Should Unemployment Insurance Vary over the Business Cycle? Staff Working Paper 2020-47 Serdar Birinci, Kurt See Should unemployment benefits be more generous during economic downturns? The optimal amount and duration of benefit payments ultimately depend on the demographic and wealth characteristics of benefit recipients. Content Type(s): Staff research, Staff working papers Topic(s): Business fluctuations and cycles, Fiscal policy, Labour markets JEL Code(s): E, E2, E24, E3, E32, J, J6, J64, J65
Earnings Dynamics and Intergenerational Transmission of Skill Staff Working Paper 2020-46 Lance Lochner, Youngmin Park How are your past, current and future earnings related to those of your parents? We explore this by using 37 years of Canadian tax data on two generations. Content Type(s): Staff research, Staff working papers Topic(s): Econometric and statistical methods, Labour markets, Potential output, Productivity JEL Code(s): C, C3, C33, J, J2, J24, J6, J62