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The disintegrating Canadian labour market? The extent of the market then and now

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  • Patrick J. Coe
  • J.C. Herbert Emery

Abstract

. Analysis of real wages for three occupations in 13 Canadian cities for 1901–50 suggests Canada had a national labour market at least until 1950. However, analysis of real wages for 10 Canadian cities for 1971–2000 yields little evidence favouring integration of Canada's regional labour markets. The apparent lack of labour market integration reflects a weakness of an approach that assumes markets are in equilibrium. Unemployment rates after 1970 suggest that some regional markets may be characterized by excess labour supply. Analysis of relative provincial unemployment rates yields evidence consistent with local labour force adjustment to changing labour market conditions. JEL classification: E24, J61 Le marché du travail en désintégration au Canada?L’étendue du marché alors et maintenant. Les auteurs analysent les salaires réels pour trois occupations dans 13 villes canadiennes au cours de la période 1901–50 et suggèrent que le Canada a joui d’un marché du travail qui était national tout au moins jusqu’à 1950. Toutefois, l’analyse des salaires réels dans 10 villes canadiennes au cours de la période 1971–2000 ne fournit pas de résultats supportant l’idée d’intégration des marchés régionaux du travail. On suggère que le manque apparent d’intégration du marché du travail est l’effet d’écho d’une approche qui présume que les marchés sont en équilibre. La période de l’après 1970 en est une où les taux de chômage suggèrent plutôt que certains marchés régionaux peuvent être raisonnablement caractérisés comme définis par une offre excédentaire de travail. Une analyse des taux de chômage provinciaux relatifs révèle que la force de travail locale s’ajuste aux conditions changeantes du marché du travail.

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  • Patrick J. Coe & J.C. Herbert Emery, 2004. "The disintegrating Canadian labour market? The extent of the market then and now," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 37(4), pages 879-897, November.
  • Handle: RePEc:wly:canjec:v:37:y:2004:i:4:p:879-897
    DOI: 10.1111/j.0008-4085.2004.00252.x
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    References listed on IDEAS

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    1. Stigler, George J & Sherwin, Robert A, 1985. "The Extent of the Market," Journal of Law and Economics, University of Chicago Press, vol. 28(3), pages 555-585, October.
      • Stigler, George J. & Sherwin, Robert A., 1983. "The Extent of the Market," Working Papers 31, The University of Chicago Booth School of Business, George J. Stigler Center for the Study of the Economy and the State.
    2. Papell, David H., 1997. "Searching for stationarity: Purchasing power parity under the current float," Journal of International Economics, Elsevier, vol. 43(3-4), pages 313-332, November.
    3. J. C. Herbert Emery & Clint Levitt, 2002. "Cost of living, real wages and real incomes in thirteen Canadian cities, 1900–1950," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 35(1), pages 115-137, February.
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    6. Marvin McInnis, 1968. "The Trend of Regional Income Differentials in Canada," Canadian Journal of Economics, Canadian Economics Association, vol. 1(2), pages 440-470, May.
    7. Rosenbloom, Joshua L., 1990. "One Market or Many? Labor Market Integration in the Late Nineteenth-Century United States," The Journal of Economic History, Cambridge University Press, vol. 50(1), pages 85-107, March.
    8. Oh, Keun-Yeob, 1996. "Purchasing power parity and unit root tests using panel data," Journal of International Money and Finance, Elsevier, vol. 15(3), pages 405-418, June.
    9. G. S. Maddala & Shaowen Wu, 1999. "A Comparative Study of Unit Root Tests with Panel Data and a New Simple Test," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 61(S1), pages 631-652, November.
    10. Andrews, Donald W K, 1993. "Exactly Median-Unbiased Estimation of First Order Autoregressive/Unit Root Models," Econometrica, Econometric Society, vol. 61(1), pages 139-165, January.
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    Citations

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    Cited by:

    1. Jason Allen & Robert Amano & David P. Byrne & Allan W. Gregory, 2009. "Canadian city housing prices and urban market segmentation," Canadian Journal of Economics, Canadian Economics Association, vol. 42(3), pages 1132-1149, August.
    2. Elizabeth Wakerly & Byron Scott & James Nason, 2006. "Common trends and common cycles in Canada: who knew so much has been going on?," Canadian Journal of Economics, Canadian Economics Association, vol. 39(1), pages 320-347, February.
    3. Bruce Cater & Byron Lew, 2018. "The impact of climate on the law of one price: A test using North American food prices from the 1920s," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 51(4), pages 1191-1220, November.
    4. Patrick J. Coe, 2018. "Downward nominal wage rigidity: Evidence from Canada 1901–1950," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 51(3), pages 946-967, August.
    5. Ross D. Hickey & David S. Jacks, 2011. "Nominal rigidities and retail price dispersion in Canada over the twentieth century," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 44(3), pages 749-780, August.
    6. Janmaat, Johannus & Harris, Lindsay & Carlaw, Kenneth & Evans, Mike, 2019. "Action economics? working with citizen groups in Revelstoke, BC to evaluate the impact of a living wage," MPRA Paper 96740, University Library of Munich, Germany.
    7. Alexander, Patrick D. & Keay, Ian, 2018. "A general equilibrium analysis of Canada’s national policy," Explorations in Economic History, Elsevier, vol. 68(C), pages 1-15.
    8. Rosés, Joan R. & Minns, Chris, 2018. "Power to the Periphery? The failure of Regional Convergence in Canada, 1890-2006," CEPR Discussion Papers 12803, C.E.P.R. Discussion Papers.
    9. J. C. Herbert Emery & Ana Ferrer & David Green, 2012. "Long-Term Consequences of Natural Resource Booms for Human Capital Accumulation," ILR Review, Cornell University, ILR School, vol. 65(3), pages 708-734, July.
    10. Mark Partridge & Dan Rickman, 2009. "Canadian regional labour market evolutions: a long-run restrictions SVAR analysis," Applied Economics, Taylor & Francis Journals, vol. 41(15), pages 1855-1871.
    11. J.C. Herbert Emery & Ronald D. Kneebone, 2008. "Socialists, Populists, Resources, and the Divergent Development of Alberta and Saskatchewan," Canadian Public Policy, University of Toronto Press, vol. 34(4), pages 419-440, December.

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    More about this item

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers

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