The Canada-U.S. Free Trade Agreement and Labour Market Adjustment in Canada
AbstractEvidence suggests that the Canada-U.S. Free Trade Agreement (CUSTA) had almost no effect on earnings and had a small negative effect on manufacturing employment. Theory suggests that a change in trade policy may affect skilled and less-skilled workers differently. The labour market consequences of CUSTA tariff reductions are analysed in this paper. It is found that the tariff reductions lowered employment predominantly among less-skilled workers but did not affect the earnings of either skilled or less-skilled workers. The employment effects are due to the fact that relatively less-skill-intensive industries were more highly protected than high-skill-intensive industries prior to CUSTA.
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Bibliographic InfoPaper provided by Department of Economics, University of Calgary in its series Working Papers with number 1998-11.
Date of creation: 02 Oct 1998
Date of revision: 02 Oct 1998
Other versions of this item:
- Eugene Beaulieu, 2000. "The Canada-U.S. Free Trade Agreement and labour market adjustment in Canada," Canadian Journal of Economics, Canadian Economics Association, vol. 33(2), pages 540-563, May.
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