Changes in the Relative Structure of Wages and Employment: A Comparison of the United States, Canada, and France
Standard models suggest that adverse labor demand shocks will lead to bigger employment losses if institutional factors like minimum wages and trade unions prevent downward wage adjustments. Some economists have argued that this insight explains the contrast between the United States, where real wages fell over the 1980s and aggregate employment expanded vigorously, and Europe, where real wages were (roughly) constant and employment was stagnant. We test this hypothesis by comparing changes in wages and employment rates over the 1980s for different age and education groups in the United States, Canada, and France. We argue that the same forces that led to falling real wages for less-skilled workers in the U.S. affected similar workers in Canada and France. Consistent with the view that labor market institutions are more rigid in France, and more flexible in the U.S., we find that relative wages of less-skilled workers fell the most in the U.S., fell somewhat less in Canada, and did not fall at all in France. Contrary to expectations, however, we find little evidence that wage inflexibilities generated divergent patterns of relative employment growth across the three countries.
|Date of creation:||Mar 1996|
|Date of revision:|
|Publication status:||published as David Card & Francis Kramarz & Thomas Lemieux, 1999. "Changes in the Relative Structure of Wages and Employment: A Comparison of the United States, Canada, and France," The Canadian Journal of Economics / Revue canadienne d'Economique, vol 32(4).|
|Contact details of provider:|| Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.|
Web page: http://www.nber.org
More information through EDIRC
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.:
- Krugman, Paul, 1993. "Inequality and the Political Economy of Eurosclerosis," CEPR Discussion Papers 867, C.E.P.R. Discussion Papers.
- 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.
- Eli Berman & John Bound & Zvi Griliches, 1994. "Changes in the Demand for Skilled Labor within U. S. Manufacturing: Evidence from the Annual Survey of Manufactures," The Quarterly Journal of Economics, Oxford University Press, vol. 109(2), pages 367-397.
- 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.
- 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.
- 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.
- 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.
- Riddell, W.C., 1993.
"Unionization in Canada and the United States: A Tale of Two Countries,"
1993-1, Queen's at Kingston - Sch. of Indus. Relat. Papers in Industrial Relations.
- 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.
- Chinhui Juhn, 1992. "Decline of Male Labor Market Participation: The Role of Declining Market Opportunities," The Quarterly Journal of Economics, Oxford University Press, vol. 107(1), pages 79-121.
- 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.
- 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.
- repec:aei:rpbook:52903 is not listed on IDEAS
- 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.
When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:5487. See general information about how to correct material in RePEc.
If references are entirely missing, you can add them using this form.