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Changes in the relative structure of wages and employment : a comparison of the United States, Canada, and France

Author: David E Card; Francis Kramarz; Thomas Lemieux; National Bureau of Economic Research.
Publisher: Cambridge, MA : National Bureau of Economic Research, ©1996.
Series: Working paper series (National Bureau of Economic Research), working paper no. 5487.
Edition/Format:   Print book : Document   Computer File : EnglishView all editions and formats
Summary:
Abstract: 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  Read more...
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Material Type: Document, Internet resource
Document Type: Book, Computer File, Internet Resource
All Authors / Contributors: David E Card; Francis Kramarz; Thomas Lemieux; National Bureau of Economic Research.
OCLC Number: 34651995
Notes: "March 1996."
Description: 35, [17] pages : illustrations ; 22 cm.
Series Title: Working paper series (National Bureau of Economic Research), working paper no. 5487.
Responsibility: David Card, Francis Kramarz, Thomas Lemieux.

Abstract:

Abstract: 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.

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