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Wages, Implicit Contracts, and the Business Cycle: Evidence from Canadian Micro Data*

* This paper is a replication of an original study

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  • James Ted McDonald
  • Christopher Worswick

Abstract

Evidence of macroeconomic conditions impacting the earnings of men in Canada in a manner consistent with an implicit contracting framework is found using data from eleven cross-sectional surveys spanning the years 1981-1992. The estimates are similar to those found by Beaudry and DiNardo (1991) using U.S. data. Their analysis is extended to incestigate whether the effects of macroeconomic conditions differ by age. Evidence is found that the wages of young men and men near retirement are most sensitive to changes in the macroeconomic conditions over their job tenure.
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Suggested Citation

  • James Ted McDonald & Christopher Worswick, 1999. "Wages, Implicit Contracts, and the Business Cycle: Evidence from Canadian Micro Data," Journal of Political Economy, University of Chicago Press, vol. 107(4), pages 884-913, August.
    • Handle: RePEc:ucp:jpolec:v:107:y:1999:i:4:p:884-913
    DOI: 10.1086/250083
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    References listed on IDEAS

    as
    1. 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.
    2. 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, June.
    3. Bils, Mark J, 1985. "Real Wages over the Business Cycle: Evidence from Panel Data," Journal of Political Economy, University of Chicago Press, vol. 93(4), pages 666-689, August.
    4. Topel, Robert H, 1991. "Specific Capital, Mobility, and Wages: Wages Rise with Job Seniority," Journal of Political Economy, University of Chicago Press, vol. 99(1), pages 145-176, February.
    5. Beaudry, Paul & DiNardo, John, 1991. "The Effect of Implicit Contracts on the Movement of Wages over the Business Cycle: Evidence from Micro Data," Journal of Political Economy, University of Chicago Press, vol. 99(4), pages 665-688, August.
    6. Card, David & Freeman, Richard B. (ed.), 1993. "Small Differences That Matter," National Bureau of Economic Research Books, University of Chicago Press, number 9780226092836, Febrero.
    Full references (including those not matched with items on IDEAS)

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    Replication

    This item is a replication of:
  • Beaudry, Paul & DiNardo, John, 1991. "The Effect of Implicit Contracts on the Movement of Wages over the Business Cycle: Evidence from Micro Data," Journal of Political Economy, University of Chicago Press, vol. 99(4), pages 665-688, August.

    • More about this item

    JEL classification:

    • J19 - Labor and Demographic Economics - - Demographic Economics - - - Other
    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General

    Lists

    This item is featured on the following reading lists, Wikipedia, or ReplicationWiki pages:
    1. Wages, Implicit Contracts, and the Business Cycle: Evidence from Canadian Micro Data (JPE 1999) in ReplicationWiki

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