J23 - Labor Demand
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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. -
A Canada-US Comparison of Labour Market Conditions
In this note, we provide a brief comparison of the recent developments in the labour markets in Canada and the United States. Our analysis indicates that slack remains in the Canadian labour market, while the US labour market is close to full employment. -
The US Labour Market: How Much Slack Remains?
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. -
May 16, 2016 The Micro and Macro of Downward Nominal Wage Rigidity
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. -
Extending the Labour Market Indicator to the Canadian Provinces
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. -
Exchange Rate Fluctuations and Labour Market Adjustments in Canadian Manufacturing Industries
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. -
May 13, 2014 Beyond the Unemployment Rate: Assessing Canadian and U.S. Labour Markets Since the Great Recession
This article provides a broad perspective on the performance of the labour market in Canada and the United States since the Great Recession. It also presents a simple way to summarize much of this information in a single composite labour market indicator (LMI) for both countries. The LMI suggests that the unemployment rate in Canada has evolved largely in line with overall labour market conditions since the recession, but may have modestly overstated the extent of recent improvement. The U.S. unemployment rate, in contrast, appears to have substantially overstated the post-recession improvement in labour market conditions. -
Fixed-Term and Permanent Employment Contracts: Theory and Evidence
This paper constructs a theory of the coexistence of fixed-term and permanent employment contracts in an environment with ex-ante identical workers and employers. Workers under fixed-term contracts can be dismissed at no cost while permanent employees enjoy labor protection. -
Unsecured Debt, Consumer Bankruptcy, and Small Business
In this paper we develop a quantitative model of entrepreneurial activity (risk-taking) and consumer bankruptcy choices and use the model to study the effects of bankruptcy regulations on entrepreneurial activity, bankruptcy rate and welfare. -
Education and Self-Employment: Changes in Earnings and Wealth Inequality
The author quantitatively studies the interaction between education and occupation choices and its implication for the relationship between the changes in earnings inequality and the changes in wealth inequality in the United States over the 1983–2001 period.