Issues on the Measurement of the Solow Residual and the Testing of its Exogeneity: a Tale of Two Countries

Using aggregate US and Canadian data, this paper examines the implications for the empirical assessment of market structure and exogeneity of productivity shocks of correcting the Solow residual for variation in capacity utilization. In contrast to most studies, not accounting for capacity utilization, our results suggest that the US and Canadian market structures are well described by constant returns to scale and perfect competition. They also suggest that Canadian productivity shocks are exogenous to real and monetary variables, while US productivity shocks become exogenous to narrowly-defined monetary aggregates and monetary policy innovations when the capital stock is adjusted for variations in utilization rates. À l'aide de données agrégées américaines et canadiennes, nous examinons les implications empiriques quant à la structure de marché et à l'exogénéité des chocs de productivité, suite à la correction de la mesure du résidu de Solow lorsqu'il y a utilisation variable du capital. Comparativement, à la plupart des études qui ont ignoré cette considération, nos résultats suggèrent qu'en agrégé, les structures de marché canadienne et américaine sont convenablement caractérisées par des rendements constants à l'échelle et la concurrence parfaite. Nous trouvons aussi qu'après ajustement pour un taux variable d'utilisation du stock de capital, la mesure corrigée des chocs de productivité canadiens est exogène aux variables monétaires et réelles, alors que celle des chocs de productivité américains devient exogène aux agrégats monétaires étroits et aux innovations monétaires.Solow residuals; exogeneity; productivity shocks; market structure; varying capacity utilization

Demographic Shifts and Labour Force Participation Rates in Canada

Labour force participation rates vary greatly by age, with persons 55 and over having much lower participation rates than younger persons. Consequently, changes in the demographic composition of the population can exert a long-run effect on aggregate participation rates. In the third article of the symposium, Bob Dugan and Benoît Robidoux examine the impact of demographic shifts on labour force participation in Canada. They use an accounting framework and plausible trend participation rates for 16 demographic groups with source population estimates to estimate an aggregate structural participation rate for Canada. They find that the ageing of the population has already started to exert downward pressure on the aggregate participation rate in Canada due to longer life expectancy and the resulting growing proportion of the population in the low-participation rate 65 and over age group. The movement of the baby boom generation into the 65 and over group in coming years will intensify this trend. Between 1989 and 1997 they find that the demographic composition effect reduced the aggregate participation rate by almost 1 percentage point, and that from now to 2030 it will reduce the participation rate by an additional 8.5 points. Of course, greater than expected trend increases in labour force participation rates by older age groups could offset some of this composition effect. The authors point out that changes in demographic composition had virtually no effect on the participation rate in the 1990s in the United States as the share of the population 65 and over was stable. This situation reflects the fact that the United States became an “older” society earlier than Canada due to an earlier and smaller baby boom and a higher average age for immigrants. Dugan and Robidoux calculate a trend participation rate of 66.2 in 1997, 1.4 percentage points above the actual rate of 64.8 per cent. Based on this rate they conclude that about one half of the 2.7 point decline in the participation rate in the 1990s was structural and one half cyclical.Canada, Labour Force Participation, Labor Force Participation, Participation Rate, Labour Force Participation Rate, Labor Force Participation Rate, Age Structure, Age, Sex, Gender, Aging, Ageing

Labelle en quête d'identité. Aménager un noyau villageois attractif

Affiche de projet terminal, baccalauréat en Urbanisme. Institut d'urbanisme, Université de Montréal

La demande d’éducation des jeunes québécois

Ce mémoire porte sur les déterminants qui sont à la base de la décision de poursuivre ses études chez un groupe de jeunes Québécois. Le modèle utilisé s’inspire de la théorie de l’investissement en capital humain. Parmi les facteurs retenus et analysés, on peut relever des caractéristiques personnelles de l’élève, son milieu familial, un ensemble de variables scolaires, l’expérience antérieure sur le marché du travail, ainsi que des caractéristiques plus générales de ce marché. L’ensemble des résultats met en relief l’importance du milieu familial mais il est également compatible avec des thèses qui montrent l’influence du manque à gagner.This paper reports empirical evidence on the determinants of the decision to stay in school for a group of young Quebecers. The model used is derived from the theory of investment in human capital. The independent variables refer to personal characteristics, family environment, school environment, early labour market experience and more general characteristics of this market. Empirical results show the influence of family variables but they are also fully consistent with theories that emphasize the importance of foregone earnings in the determination of the demand for education