Changes in the Relative Structure of Wages and Employment: A Comparison of the United States, Canada, and France / David Card, Francis Kramarz, Thomas Lemieux.

Format:

Book

Author/Creator:

Card, David.

Contributor:

National Bureau of Economic Research.

Kramarz, Francis.

Lemieux, Thomas.

Series:

Working Paper Series (National Bureau of Economic Research) no. w5487.

NBER working paper series no. w5487

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Changes in the Relative Structure of Wages and Employment

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 1996.

Summary:

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.

Notes:

Print version record

March 1996.