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Determinants of Trends in Living Standards in Canada and the United States, 1989-2000

Author

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  • Andrew Sharpe

Abstract

The foundation for real income growth is productivity growth. This basic principle of economics is well illustrated in this article by Andrew Sharpe of the Centre for the Study of Living Standards on the determinants of trends in living standards in Canada in the 1990s. He shows that over the 1989-2000 period 80 per cent of the widening of Canada's income gap with the United States can be accounted for by our slower labour productivity growth. In the first half of the period our falling employment-population ratio contributed to the decline in our standard of living relative to that in the United States. With the recovery in the labour market in the second half of the decade much of this decline was reversed. The acceleration of productivity growth in the United States after 1995 was responsible for our relative deterioration in living standards during this period.

Suggested Citation

  • Andrew Sharpe, 2001. "Determinants of Trends in Living Standards in Canada and the United States, 1989-2000," International Productivity Monitor, Centre for the Study of Living Standards, vol. 2, pages 3-10, Spring.
    • Handle: RePEc:sls:ipmsls:v:2:y:2001:1
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    File URL: http://www.csls.ca/ipm/2/sharpe-e.pdf
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    File URL: http://www.csls.ca/ipm/2/sharpe-f.pdf
    File Function: version en francais, pp:3-10
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    Citations

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    Cited by:

    1. Keith Banting & Andrew Sharpe & France St-Hilaire, 2001. "The Longest Decade: Introduction and Overview," The Review of Economic Performance and Social Progress, in: Andrew Sharpe, Executive Director & France St-Hilaire, Vice-President , Research & Keith Banting, Di (ed.), The Review of Economic Performance and Social Progress 2001: The Longest Decade: Canada in the 1990s, volume 1, Centre for the Study of Living Standards;The Institutute for Research on Public Policy.
    2. R. Quentin Grafton & Stephen Knowles & P. Dorian Owen, 2002. "Social Divergence and Productivity: Making a Connection," The Review of Economic Performance and Social Progress, in: Andrew Sharpe, Executive Director & France St-Hilaire, Vice-President , Research & Keith Banting, Di (ed.), The Review of Economic Performance and Social Progress 2002: Towards a Social Understanding of Productivity, volume 2, Centre for the Study of Living Standards;The Institutute for Research on Public Policy.

    More about this item

    Keywords

    Income; Growth; Productivity; Determinants; Trends; Living Standards; Income Gap; Labour Productivity; Labor; Acceleration; 1990s; Employment; Demographics; Canada; United States;
    All these keywords.

    JEL classification:

    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • O51 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - U.S.; Canada
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure

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