Shifting Skill Demand and the Canada-US Unemployment Gap: Evidence from Prime-Age Men
This paper considers the possible role of shifts in labour demand away from unskilled workers, combined with an institutionally-generated greater labour supply elasticity in Canada, in explaining the apparent secular increase in Canadian male unemployment, and in explaining the emergence of the Canada-US unemployment rate gap in the 1980s. Using comparable data on annual weeks worked and unemployed in both countries, we identify four main facts which are consistent with this explanation: Both Canada and the US experienced wage polarization over this period, with substantial real wage declines for unskilled men; annual weeks worked fell disproportionately among unskilled workers in both countries; responses of weeks worked in wage declines were more elastic in Canada; and aggregate movements out of employment over this period corresponded closely to movements into unemployment in Canada. Interestingly, however, unskilled US men were more likely than Canadians to leave the labour force as their employment fell, adding further to the Canada-US unemployment gap. As well, some fairly substantial decreases in weeks worked are observed quite high up in the Canadian wage distribution, where wages did not fall appreciably. The latter changes cannot easily be explained by shifts in labour demand alone.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 24 (1998)
Issue (Month): s1 (February)
|Contact details of provider:|| Postal: |
Web page: http://economics.ca/cpp/
|Order Information:|| Web: http://www.utpjournals.com/cpp/ Email: |
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Orley Ashenfelter & David Card, 1986.
"Why Have Unemployment Rates in Canada and the U.S. Diverged?,"
NBER Working Papers
1840, National Bureau of Economic Research, Inc.
- Orley Ashenfelter & David Card, 1986. "Why Have Unemployment Rates in Canada and the U.S. Diverged?," Working Papers 584, Princeton University, Department of Economics, Industrial Relations Section..
- Ross D. Milbourne & Douglas D. & W. David Scoones, 1989.
"Unemployment Insurance and Unemployment Dynamics,"
750, Queen's University, Department of Economics.
- David Card, 1992.
"A Comparative Analysis of Unemployment in Canada and the United States,"
677, Princeton University, Department of Economics, Industrial Relations Section..
- David Card & W. Craig Riddell, 1993. "A Comparative Analysis of Unemployment in Canada and the United States," NBER Chapters, in: Small Differences That Matter: Labor Markets and Income Maintenance in Canada and the United States, pages 149-190 National Bureau of Economic Research, Inc.
- Burbidge, John B & Magee, Lonnie & Robb, A Leslie, 1997. "Canadian Wage Inequality over the Last Two Decades," Empirical Economics, Springer, vol. 22(2), pages 181-203.
- David Card & Richard B. Freeman, 1993. "Small Differences That Matter: Labor Markets and Income Maintenance in Canada and the United States," NBER Books, National Bureau of Economic Research, Inc, number card93-1, August.
- Chinhui Juhn & Kevin M. Murphy & Robert H. Topel, 1991. "Why Has the Natural Rate of Unemployment Increased over Time?," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 22(2), pages 75-142.
- Richard B. Freeman, 1995. "Are Your Wages Set in Beijing?," Journal of Economic Perspectives, American Economic Association, vol. 9(3), pages 15-32, Summer.
- Murphy, Kevin M & Welch, Finis, 1993. "Inequality and Relative Wages," American Economic Review, American Economic Association, vol. 83(2), pages 104-09, May.
When requesting a correction, please mention this item's handle: RePEc:cpp:issued:v:24:y:1998:i:s1:p:170-191. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Prof. Werner Antweiler)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.