Labour markets

• The US Labour Market: How Much Slack Remains?

  Staff Analytical Note 2016-9 Robert Fay, James Ketcheson

  Despite the US unemployment rate being close to estimates of the non-accelerating-inflation rate of unemployment (NAIRU), measures of underemployment remain elevated, which could be an indication of remaining labour market slack. The shares of involuntary part-time workers and long-term unemployment are high relative to the current stage of the business cycle, suggesting available labour inputs are being underutilized.

  Content Type(s): Staff Research, Staff Analytical Notes Topic(s): International topics, Labour markets, Recent economic and financial developments JEL Code(s): E, E2, E24, J, J2, J21, J23

• Un examen plus approfondi des pressions salariales au Canada

  Staff Analytical Note 2016-6 Dany Brouillette, Laurence Savoie-Chabot

  In this note, we provide a brief outline of the recent developments in wage measures in Canada. We then assess whether wage growth is consistent with its fundamentals.

  Content Type(s): Staff Research, Staff Analytical Notes Topic(s): Labour markets, Productivity JEL Code(s): E, E2, E24, J, J3, J30

• 16 May 2016 The Micro and Macro of Downward Nominal Wage Rigidity

  Bank of Canada Review - Spring 2016 Robert Amano, Dany Brouillette, Stefano Gnocchi, Natalia Kyui

  The article examines the extent of downward nominal wage rigidity in Canada and its implications for monetary policy. The authors ask whether its existence is a sufficient argument for a higher inflation target if concerns about the effective lower bound are adequately addressed.

  Content Type(s): Publications, Bank of Canada Review Article Topic(s): Inflation and prices, Inflation targets, Labour markets, Monetary policy framework JEL Code(s): E, E3, E4, E5, J, J2, J23, J3, J30

• April 2016 Annual Reassessment of Potential Output in Canada

  Staff Analytical Note 2016-4 Andrew Agopsowicz, Dany Brouillette, Shutao Cao, Natalia Kyui, Pierre St-Amant

  This note summarizes the Bank of Canada’s 2016 annual reassessment of potential output growth, which is projected to be 1.5 per cent over 2016–18 and 1.6 per cent in 2019–20. This projection is weaker than the one presented in the April 2015 Monetary Policy Report.

  Content Type(s): Staff Research, Staff Analytical Notes Topic(s): Labour markets, Potential output, Productivity

• Canadian Labour Market Dispersion: Mind the (Shrinking) Gap

  Staff Analytical Note 2016-3 David Amirault, Naveen Rai

  Shocks to a currency area can and often do have asymmetric impacts on its regions that, in the absence of perfect labour mobility, lead to gaps in relative labour market performance. Witness, for example, the effects of the 2008/09 recession and subsequent financial crisis in Europe on the dispersion of employment rates across the euro area – and to a lesser extent the United States.

  Content Type(s): Staff Research, Staff Analytical Notes Topic(s): Labour markets, Regional economic developments JEL Code(s): J, J0, J01, R, R2, R23

• Capital Structure, Pay Structure and Job Termination

  Staff Working Paper 2016-12 Jason Allen, James R. Thompson

  We develop a model to analyze the link between financial leverage, worker pay structure and the risk of job termination. Contrary to the conventional view, we show that even in the absence of any agency problem among workers, variable pay can be optimal despite workers being risk averse and firms risk neutral.

  Content Type(s): Staff Research, Staff Working Papers Topic(s): Financial Institutions, Labour markets JEL Code(s): G, G2, G24, J, J3, J33

• Reconciling the Differences in Aggregate U.S. Wage Series

  Staff Working Paper 2016-1 Julien Champagne, André Kurmann, Jay Stewart

  Average hourly real wage series from the Labor Productivity and Costs (LPC) program and the Current Employment Statistics (CES) program have evolved very differently over the past decades.

  Content Type(s): Staff Research, Staff Working Papers Topic(s): Business fluctuations and cycles, Labour markets JEL Code(s): E, E0, E01, E2, E24, E3, E30, J, J3, J30

• Extending the Labour Market Indicator to the Canadian Provinces

  Staff Discussion Paper 2016-2 Alexander Fritsche, Katherine Ragan

  Calculating the labour market indicator (LMI) at the provincial level provides useful insights into Canada’s regional economies and reveals differing trends in the state of underlying labour market conditions across provinces. Conclusions based on the Canadian LMI do not necessarily translate to the provinces. In most cases, the correlations between the provincial LMIs and the underlying labour market variables have the expected sign.

  Content Type(s): Staff Research, Staff Discussion Papers Topic(s): Labour markets, Recent economic and financial developments JEL Code(s): E, E2, E24, E27, J, J2, J21, J23

• The Complex Adjustment of the Canadian Economy to Lower Commodity Prices

  Staff Analytical Note 2016-1 Julien Champagne, Nikita Perevalov, Hope Pioro, Dany Brouillette, Andrew Agopsowicz

  In this analytical note, we provide a comprehensive assessment of the complex structural adjustment facing the Canadian economy following the commodity price decline since mid-2014. We quantify separately the impacts coming from the commodity sector restructuring and the broader effect of significantly lower terms of trade.

  Content Type(s): Staff Research, Staff Analytical Notes Topic(s): Business fluctuations and cycles, Exchange rates, Labour markets, Potential output, Recent economic and financial developments JEL Code(s): E, E1, E17, E2, E27, E5, E52, J, J2, Q, Q0, Q00

• Exchange Rate Fluctuations and Labour Market Adjustments in Canadian Manufacturing Industries

  Staff Working Paper 2015-45 Gabriel Bruneau, Kevin Moran

  We estimate the link between exchange rate fluctuations and the labour input of Canadian manufacturing industries. The analysis is based on a dynamic model of labour demand, and the econometric strategy employs a panel two-step approach for cointegrating regressions.

  Content Type(s): Staff Research, Staff Working Papers Topic(s): Econometric and statistical methods, Exchange rate regimes, Exchange rates, Labour markets, Recent economic and financial developments JEL Code(s): E, E2, E24, F, F1, F14, F16, F3, F31, F4, F41, J, J2, J23