Canadian Journal of Economics-Revue Canadienne D Economique最新文献

This paper studies two legislative changes that extended legal penalties for sex with minors ages 14 to 16 in Canada and the US. Using differences-in-differences and triple-differences strategies, it presents new evidence that age of consent laws affect teen fertility, especially the rate that teenage girls aged 14 to 15 become pregnant and have children from adult men of ages targeted by the law changes. I find that the 2008 increase in Canada and the 1995 increase in the American state of Georgia led to substantial decreases in the fraction of births arising from partnerships made illegal. These impacts reflect net decreases in births and falling abortions rather than changes in reporting, implying decreased pregnancy rates. Further evidence suggests that the laws deterred relationships between teens and targeted partners altogether and I also uncover a strong response to the law through marriage of teens aged 14 to 15 in Georgia, which then provided a loophole because age of consent laws did not apply to married couples.

We examine how immigrant employment enhances trade at the firm level using unique administrative matched employer–employee data from Canada. We augment a standard model of firms' export market entry and sales decisions with trade costs that depend on destination-specific immigrant employment at the firm level. We estimate simple structural equations derived from the model that relate destination-specific exporting decisions to immigrant employment. We develop a method to deal with the potential endogeneity of immigrant employment that exploits the optimality conditions associated with the firm's employment decision. We find positive and statistically significant effects of firm-level immigrant employment on exporting. These effects vary with product type and immigrant employee characteristics in ways consistent with the idea that immigrant employees alleviate information barriers to trade.

Oil price shocks are considered to be one of the important factors behind US recessions, yet little is known about the transmission channels of oil price shocks. What complicates the matter further is the small share of oil in production. To address the issue the literature has incorporated amplifying channels such as endogenous depreciation or variable markups. I build a DSGE model with heterogeneous firms and show that inclusion of firm entry and exit amplifies the effect of oil price shocks. Using US firm-level data, I see that oil shocks are negatively correlated with firm entry and positively correlated with firm exit as predicted by the model. Further, the DSGE model suggests it is the bigger and more-productive firms that survive after an oil price shock.

In a three-country model of endogenous trade agreements, we study the implications of the most-favoured-nation (MFN) clause when countries are free to form discriminatory preferential trade agreements (PTAs). Under current rules of the World Trade Organization (WTO), although non-member countries face discrimination at the hands of PTA members, they themselves are obligated to abide by MFN and treat PTA members in a non-discriminatory fashion. The non-discrimination constraint of MFN reduces the potency of a country's optimal tariffs and therefore its incentive for unilaterally opting out of trade liberalization. Thus, MFN can act as a catalyst for trade liberalization. However, when PTAs take the form of customs unions, the efficiency case for MFN as well as its pro-liberalization effect is weaker because one country finds itself deliberately excluded by the other two as opposed to staying out voluntarily.

We introduce equilibrium indeterminacy into a two-country incomplete asset model with imperfect competition to analyze the role of self-fulfilling expectations or beliefs in explaining international business cycles. We find that, when self-fulfilling beliefs are correlated with technology shocks, the model can account for the countercyclical behaviour observed for the terms of trade and real net exports while simultaneously generating higher volatilities relative to output, as in the data. The choice of the labour-supply elasticity is shown to be critical for generating a negative correlation between the real exchange rate and relative consumption, thereby resolving the Backus–Smith puzzle.

We study the wage-setting problem of an employer with private information about demand for its product when workers can engage in costly on-the-job search. Employers understand that low wage offers may convey bad news that induces workers to search. The unique perfect sequential equilibrium wage strategy is characterized by: (i) pooling by intermediate-revenue employers on a common wage that just deters search, (ii) discontinuously lower revealing offers by low-revenue employers for whom the benefit of deterring search fails to warrant the required high pooling wage and (iii) high revealing offers by high-revenue employers seeking to deter aggressive raiders.

While we would expect that cross-border patents are used to protect a technology that is made available in another country, that technology could either be produced locally or imported. International patent filings could therefore be either complements or substitutes to international trade. This study combines data on patenting and trade for 149 countries and 249 industries between 1974 and 2006 with a “three-way” panel data model that addresses several biases emphasized in the trade literature in order to provide a systematic analysis of how bilateral trade responds to cross-border patent filings. We find that cross-border patents have a positive (complementary) overall effect on the patent-filing country's exports to the patent-granting country and no effect overall on imports flowing in the opposite direction. These effects vary substantially across industry groups, with patents promoting significantly more export growth in industries with a high demand elasticity and in industries that are relatively more downstream in supply chains. We also find that patents, once obtained, are associated with increased trade even in jurisdictions with weak intellectual property regimes.

This paper develops a monopolistic competition model of multi-product firms to explain the effect of trade liberalization on the product mix of multi-product exporting firms. The model shows that input-tariff reduction leads to increases in a firm's export values, especially for products that are farther from a firm's core competency. To test the theoretical predictions, we use the merged data built upon the highly disaggregated Chinese firm-level production data and customs data for 2000–2006. Consistent with the theory, the positive impact of input trade liberalization on export value is found to be more pronounced for peripheral products, and input-tariff reduction also expands a firm's product scope, affecting firm's average productivity.

Using the administrative tax return database, we document the Canadian income and tax statistics in 2000 and in 2016 and compare them with those of the US. Also, we estimate parametric tax specifications used in applied macroeconomic and public finance studies. Although these specifications are, in general, good fits for average tax rates, their estimates yield large residuals for high-income earners. We introduce a new parametric tax specification, which fits the data well and captures the rates of high-income earners better than existing tax functions. The new specification can provide better quantitative analysis because most of the tax budget is financed by high-income earners.

A Cobb–Douglas growth accounting framework is used to study the contributions of structures and land to newly constructed home prices across major Canadian cities. The data set is unusual in that land prices are directly observed rather than having to be imputed, and quality change is carefully controlled for in the measurement of structures. These data permit testing of constant returns to scale, which in conventional applications must be adopted as a maintained hypothesis, as well as the introduction of dynamic effects. Whereas standard analyses find land costs to be the dominant contributor to the growth in housing costs, I find that this varies greatly by city. Yet, despite this novel empirical result, the evidence supports other recent work that endorses the constant-returns Cobb–Douglas methodological framework.