ASYMMETRIC DEMAND SHOCKS AND REGIONAL LABOUR MARKET ADJUSTMENTS IN CANADA
Michael Sullivan, March 2017
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This paper provides a descriptive overview of disparities across Canada’s provincial labour markets since the 1970s and estimates a panel vector autoregressive model capturing regional adjustment dynamics. The results of this estimation suggest that ...region-specific, or asymmetric, labour demand shocks have lasting changes on provinces’ relative employment levels. These shocks affect employment mainly through a migration channel and a participation channel: Canadians migrate to provinces with relatively strong labour markets and demand shocks have persistent effects on provinces’ labour force participation rates. These channels account for quantitatively similar post-shock employment changes. I also discuss both the robustness of this paper’s conclusions to changes in its baseline model’s specification and a forecasting application of said model.
LABOUR MOBILITY IN THE MINING, OIL, AND GAS EXTRACTION INDUSTRY IN NEWFOUNDLAND AND LABRADOR
Yue Xing, Brian Murphy and Doug May, January 2016
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Ever since the production of its first barrel of oil in 1997, Newfoundland and Labrador has emerged as one of the major oil and gas jurisdictions. The province has since experienced significant economic growth driven by the mining, oil and gas extraction industry (hereafter referred to as “MOG industry”). Compared to an 8% share of GDP in 1997, the output of the MOG industry grew to account for more ...than half of the provincial business sector output in 20101. It led Newfoundland and Labrador to outperform Alberta, Canada’s largest energy province, by having the highest growth of the business sector nominal GDP. Meanwhile, labour participation in the MOG industry grew at a much higher rate than other industries in Newfoundland and Labrador. Its labour employment was more than doubled in the past decade. Although the MOG industry is still a relatively small industry by accounting for only 3.4% of the total labour employment in Newfoundland and Labrador, its labour productivity represented the fastest compound annual growth (11.3%) among all the industry sectors between 1997 and 2010.
The productivity performance of the booming oil business has had a big impact on Newfoundland and Labrador’s fast growing economy over 1997 and 2010 (Grand’Maison and Sharpe, 2013). This paper intends to explore the labour market changes both inter-provincially and inter-industry which would be intrinsically associated with the source of the MOG’s productivity growth. Over the 1997-2012 period, the expanding industry has drawn workers from other industries in Newfoundland and Labrador (inmovers) as well as workers from other provinces (in-migrants). At the same time there are still a number of Newfoundland and Labrador’s MOG workers migrating to other industries (out-movers) and other provinces (out-migrants). For example, Laporte, Lu and Schellenberg (2013) studied the source of labour supply through inter-provincial employees in Alberta and found that Newfoundland and Labrador contributed the biggest share of inter-provincial employees who received Alberta T4 earnings in recent years.
Given the rapid labour growth and the high labour productivity of the MOG industry, this paper explores the nature and consequence of its labour mobility. This article applies data drawn from T1 Family File(T1FF). A longitudinal database was built for all persons who filed taxes in Newfoundland and Labrador in any year from 2000 through 2012 to explore the relationship of migration and industry mobility in the expanding MOG sector in Newfoundland and Labrador. In addition, it examines the effect of individual characteristics on his/her propensity to move between the MOG industry and other industries using a binary logistic model. Results suggest that the probability of moving in or out of the MOG industry is more likely for younger persons, males, non-family persons, individuals with lower earnings, and EI recipients.