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

  • David Card
  • Francis Kramarz
  • Thomas Lemieux

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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Article provided by Canadian Economics Association in its journal Canadian Journal of Economics.

Volume (Year): 32 (1999)
Issue (Month): 4 (August)
Pages: 843-877

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Handle: RePEc:cje:issued:v:32:y:1999:i:4:p:843-877
Contact details of provider: 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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  5. 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.
  6. Richard B. Freeman & Karen Needels, 1993. "Skill Differentials in Canada in an Era of Rising Labor Market Inequality," NBER Chapters, in: Small Differences That Matter: Labor Markets and Income Maintenance in Canada and the United States, pages 45-68 National Bureau of Economic Research, Inc.
  7. 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.
  8. 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.
  9. 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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