Understanding the wage patterns of Canadian less skilled workers: the role of implicit contracts
AbstractWe examine the wage patterns of Canadian less skilled male workers over the last quarter-century by organizing workers into job entry cohorts. We find entry wages for successive cohorts declined until 1997 and then began to recover. Wage profiles steepened for cohorts entering after 1997, but not for cohorts entering in the 1980s - a period when start wages were relatively high. We argue that these patterns are consistent with a model of implicit contracts with recontracting in which a worker's current wage is determined by the best labour market conditions experienced during the current job spell.
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Bibliographic InfoArticle provided by Canadian Economics Association in its journal Canadian Journal of Economics.
Volume (Year): 43 (2010)
Issue (Month): 1 (February)
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Postal: Canadian Economics Association Prof. Steven Ambler, Secretary-Treasurer c/o Olivier Lebert, CEA/CJE/CPP Office C.P. 35006, 1221 Fleury Est Montréal, Québec, Canada H2C 3K4
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Other versions of this item:
- David A. Green & James Townsend, 2009. "Understanding the wage patterns of Canadian less skilled workers: the role of implicit contracts," IFS Working Papers W09/22, Institute for Fiscal Studies.
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
- O33 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
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- Bellou, Andriana & Kaymak, Barış, 2012. "Wages, implicit contracts, and the business cycle: Evidence from a European panel," Labour Economics, Elsevier, vol. 19(6), pages 898-907.
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