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Changes in the Relative Structure of Wages and Employment: A Comparison of the United States, Canada, and France

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  • David Card
  • Francis Kramarz
  • Thomas Lemieux

Abstract

Standard economic models suggest that adverse demand shocks will lead to bigger employment losses if institutional factors prevent real wages from declining. Some analysts have argued that this insight explains the dichotomy between the United States, where real wages of less-skilled workers fell over the 1980s and aggregate employment expanded vigorously, and Europe, where real wages of less-skilled workers were constant and employment was stagnant. We find little support for this hypothesis when we compare recent changes in wages and employment rates for different age and education groups in the United States, Canada, and France.

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Bibliographic Info

Paper provided by Princeton University, Department of Economics, Industrial Relations Section. in its series Working Papers with number 734.

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Date of creation: Dec 1995
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Handle: RePEc:pri:indrel:dsp01qf85nb29s

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Related research

Keywords: flexibility; international comparisons; wage structure;

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  1. Baker, Michael & Benjamin, Dwayne & Stanger, Shuchita, 1999. "The Highs and Lows of the Minimum Wage Effect: A Time-Series Cross-Section Study of the Canadian Law," Journal of Labor Economics, University of Chicago Press, vol. 17(2), pages 318-50, April.
  2. Borjas, George J & Ramey, Valerie A, 1994. "Time-Series Evidence on the," American Economic Review, American Economic Association, vol. 84(2), pages 10-16, May.
  3. Juhn, Chinhui, 1992. "Decline of Male Labor Market Participation: The Role of Declining Market Opportunities," The Quarterly Journal of Economics, MIT Press, vol. 107(1), pages 79-121, February.
  4. Berman, Eli & Bound, John & Griliches, Zvi, 1994. "Changes in the Demand for Skilled Labor within U.S. Manufacturing: Evidence from the Annual Survey of Manufactures," The Quarterly Journal of Economics, MIT Press, vol. 109(2), pages 367-97, May.
  5. Krugman, Paul, 1993. "Inequality and the Political Economy of Eurosclerosis," CEPR Discussion Papers 867, C.E.P.R. Discussion Papers.
  6. W. Craig Riddell, 1993. "Unionization in Canada and the United States: A Tale of Two Countries," NBER Chapters, in: Small Differences That Matter: Labor Markets and Income Maintenance in Canada and the United States, pages 109-148 National Bureau of Economic Research, Inc.
  7. Juhn, Chinhui & Murphy, Kevin M & Pierce, Brooks, 1993. "Wage Inequality and the Rise in Returns to Skill," Journal of Political Economy, University of Chicago Press, vol. 101(3), pages 410-42, June.
  8. Richard B. Freeman & Karen Needels, 1991. "Skill Differentials in Canada in an Era of Rising Labor Market Inequality," NBER Working Papers 3827, National Bureau of Economic Research, Inc.
  9. Nickell, Stephen & Bell, Brian, 1995. "The Collapse in Demand for the Unskilled and Unemployment across the OECD," Oxford Review of Economic Policy, Oxford University Press, vol. 11(1), pages 40-62, Spring.
  10. Robert Z Lawrence, 1994. "Trade, Multinationals and Labour," RBA Annual Conference Volume, in: Philip Lowe & Jacqueline Dwyer (ed.), International Intergration of the Australian Economy Reserve Bank of Australia.
  11. Lawrence F. Katz & Gary W. Loveman & David G. Blanchflower, 1993. "A Comparison of Changes in the Structure of Wages," NBER Working Papers 4297, National Bureau of Economic Research, Inc.
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