TY - JOUR AU - Card,David AU - Kramarz,Francis AU - Lemieux,Thomas TI - Changes in the Relative Structure of Wages and Employment: A Comparison of the United States, Canada, and France JF - National Bureau of Economic Research Working Paper Series VL - No. 5487 PY - 1996 Y2 - March 1996 UR - http://www.nber.org/papers/w5487 L1 - http://www.nber.org/papers/w5487.pdf N1 - Author contact info: David Card Department of Economics 549 Evans Hall, #3880 University of California, Berkeley Berkeley, CA 94720-3880 Tel: 510/642-5222 Fax: 510/643-7042 E-Mail: card@econ.berkeley.edu Francis Kramarz CREST-INSEE 15 blvd Gabriel Peri Malakoff CEDEX, 92245 FRANCE E-Mail: kramarz@ensae.fr Thomas Lemieux Department of Economics University of British Columbia #997-1873 East Mall Vancouver, BC V6T 1Z1 CANADA Tel: 604/822-2092 Fax: 604/822-5915 E-Mail: thomas.lemieux@ubc.ca AB - 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. ER -