Labour Market Adjustments to Exchange Rate Fluctuations: Evidence from Canadian Manufacturing Industries

Leung, Danny; Yuen, Terence

doi:10.1007/s11079-007-9007-y

Cited by 12 publications

(18 citation statements)

References 15 publications

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“…Though not shown, a specification estimated without the interaction terms (as in column 1) finds a negative and significant effect of the exchange rate on employment. The negative effect of currency appreciations is consistent with the finding of Leung and Yuen (2007) who study the impact of the exchange rate on labor inputs using Canadian industry‐level data from a similar period (1981–1997). Accordingly, adding the interactions indicates that the aggregate significant negative effect is motivated by exporters and foreign‐owned plants.…”

Section: Resultssupporting

confidence: 86%

Plant Scale and Exchange-Rate-Induced Productivity Growth

Fung

Baggs

Beaulieu

2011

Journal of Economics &Amp; Management Strategy

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the scale of production, and how these changes in scale influence productivity. The paper finds that a real appreciation of the domestic currency reduces shipments and this negative effect is larger for exporters (both domestic and foreign owned). The paper also finds evidence that the appreciation-induced reduction of scale negatively affects productivity at the plant level. This scale effect more than offsets any potential gains from the appreciation-induced reduction in the price of imported inputs.2. According to Baldwin and Gu (2003), in 1974, the only year when both long-and short-form plants report exports, only 0.4% of the short-form plants exported.3. In 1990, our sample captures 78.8% of total exports. That figure drops to 76.3% in 1993 and to 71.4% in 1996.

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Section: Resultssupporting

confidence: 86%

Plant Scale and Exchange-Rate-Induced Productivity Growth

Fung

Baggs

Beaulieu

2011

Journal of Economics &Amp; Management Strategy

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“…The real exchange rate of the non-oil open sector is simply not linked to real oil prices (Egert and Leonard 2008). Leung and Yuen (2007) used data on manufacturing industries coded according to the three-digit Standard Industrial Classification (SIC) system from 1981 to 1997 and examined exchange rate effects on employment and wages in Canada. They found that appreciation reduced manufacturing employment, but had little impact on wages.…”

Section: Introductionmentioning

confidence: 99%

Effects of Exchange Rates on Employment in Canada

Huang

Pang

Tang

2014

Canadian Public Policy

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Under a flexible exchange rate regime, the Canadian economy is constantly affected by fluctuations in exchange rates. This paper focuses on the effect of the exchange rate on employment in Canada. We find that appreciation of the Canadian dollar has significant effects on employment in manufacturing industries; such effects are mostly associated with the export-weighted exchange rate, but not the import-weighted exchange rate. Meanwhile, the exchange rate has little effect on jobs in non-manufacturing industries. Because the manufacturing sector accounts for only about 10 percent of employment in Canada, the overall effect of the exchange rate on employment is small. In addition, we quantify the loss of manufacturing employment associated with a commodity market boom, during which the Canadian dollar tends to appreciate. Our estimates suggest that when commodity prices increase by 15.77 percent (one standard deviation of annual change in commodity prices between 1994 and 2010), manufacturing employment in Canada decreases by 0.8 percent, which is about 0.08 percent of the total employment.Keywords: exchange rate, employment in Canada Comme le taux de change de la devise canadienne est flottant, l'économie canadienne est constamment influencée par les fluctuations des taux de change. Dans cet article, nous analysons l'effet des variations du taux de change sur l'emploi au Canada. Nous montrons qu'une appréciation du dollar canadien a des effets importants sur l'emploi dans l'industrie manufacturière, et que ces effets sont surtout associés au taux de change pondéré en fonction des exportations (ils ne sont pas associés au taux de change pondéré en fonction des importations). De plus, le taux de change a peu d'effet sur l'emploi dans les industries non manufacturières. Comme le secteur manufacturier ne compte que pour 10 % de l'emploi au Canada, l'effet du taux de change sur l'emploi total est donc faible. Par ailleurs, nous quantifions les pertes d'emplois dans le secteur manufacturier dans le cas en présence d'un boom du marché des produits de base, pendant lequel le dollar canadien a tendance à s'apprécier. Nos estimations indiquent que, quand les prix des produits de base augmentent de 15,77 % (un écart-type des fluctuations des prix des produits de base entre 1994 et 2010), l'emploi dans le secteur manufacturier décroît de 0,8 %, ce qui correspond à peu près à 0,08 % de l'emploi total.Mots clés : taux de change, l'emploi au Canada

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Section: Introductionmentioning

confidence: 99%

“…An earlier, related contribution is Leung and Yuen (), who also study the impact of exchange rate fluctuations on the labour input of Canadian manufacturing firms. The present paper offers two important contributions relative to Leung and Yuen (). First, we use a substantially longer sample (1961–2008) that allows our analysis to cover all the important movements in Canadian dollar exchange rate over the past 50 years.…”

Section: Introductionmentioning

confidence: 99%

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Exchange rate fluctuations and labour market adjustments in Canadian manufacturing industries

Bruneau

Moran²

2017

Canadian J of Economics

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We estimate the link between exchange rate fluctuations and the labour input of Canadian manufacturing industries. The analysis is based on a dynamic model of labour demand and the econometric strategy employs a panel two‐step approach for cointegrating regressions. Our data are drawn from a panel of 20 manufacturing industries from the KLEMS database and cover a long sample period that includes all cycles of appreciation and depreciation of the Canadian dollar over the last 50 years. Our results indicate that exchange rate fluctuations have significant long‐term effects on the labour input of Canada's manufacturing industries, especially for trade‐oriented industries, but that these long‐term impacts materialize very gradually following shocks.

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Labour Market Adjustments to Exchange Rate Fluctuations: Evidence from Canadian Manufacturing Industries

Cited by 12 publications

References 15 publications

Plant Scale and Exchange-Rate-Induced Productivity Growth

Plant Scale and Exchange-Rate-Induced Productivity Growth

Effects of Exchange Rates on Employment in Canada

Exchange rate fluctuations and labour market adjustments in Canadian manufacturing industries

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