Labour markets
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The Political Impact of Immigration: Evidence from the United States
In this paper we study the impact of immigration to the United States on the vote for the Republican Party by analyzing county-level data on election outcomes between 1990 and 2010. Our main contribution is to separate the effect of high-skilled and low-skilled immigrants, by exploiting the different geography and timing of the inflows of these two groups of immigrants. -
Potential Output in Canada: 2018 Reassessment
This note summarizes the reassessment of potential output, conducted by the Bank of Canada for the April 2018 Monetary Policy Report. Overall, the profile for potential output growth is expected to remain flat at 1.8 per cent between 2018 and 2020 and 1.9 per cent in 2021. -
March 13, 2018 Today’s Labour Market and the Future of Work
Governor Stephen S. Poloz discusses the untapped potential in Canada’s labour market and how it extends into the workforce of tomorrow. -
Can Media and Text Analytics Provide Insights into Labour Market Conditions in China?
The official Chinese labour market indicators have been seen as problematic, given their small cyclical movement and their only-partial capture of the labour force. In our paper, we build a monthly Chinese labour market conditions index (LMCI) using text analytics applied to mainland Chinese-language newspapers over the period from 2003 to 2017. -
February 8, 2018 At the Crossroads: Innovation and Inclusive Growth
Senior Deputy Governor Carolyn A. Wilkins discusses technological progress and how policy-makers can harness it for economic growth that benefits everyone. -
Wages: Measurement and Key Drivers
Available sources of hourly wage data in Canada sometimes send conflicting signals about wage growth. This note thus has two objectives: first, we develop a wage measure—the wage-common—to better capture the (underlying) wage pressures reflecting the common trend across the available data sources. Second, we re-examine the relationship between wage growth and macro drivers (labour market slack and labour productivity). -
The Impacts of Minimum Wage Increases on the Canadian Economy
This note reviews the channels through which scheduled minimum wage increases over the coming years may affect Canadian economic activity and inflation and assesses their macroeconomic impacts. From reduced-form estimates of direct minimum wage pass-through, we find that consumer price index (CPI) inflation could be boosted by about 0.1 percentage point (pp) on average in 2018. -
Wage Dynamics and Returns to Unobserved Skill
Economists disagree about the factors driving the substantial increase in residual wage inequality in the U.S. over the past few decades. We identify and estimate a general model of log wage residuals that incorporates: (i) changing returns to unobserved skills, (ii) a changing distribution of unobserved skills, and (iii) changing volatility in wages due to factors unrelated to skills. -
November 7, 2017 Understanding Inflation: Getting Back to Basics
Governor Stephen S. Poloz discusses how recent weak inflation in Canada and other economies can be explained by fundamental factors. -
Downward Nominal Wage Rigidity in Canada: Evidence Against a “Greasing Effect”
The existence of downward nominal wage rigidity (DNWR) has often been used to justify a positive inflation target. It is traditionally assumed that positive inflation could “grease the wheels” of the labour market by putting downward pressure on real wages, easing labour market adjustments during a recession.