The Changing Labour Force Participation of Canadians, 1969-96: Evidence from a Panel of Six Demographic Groups

Cyclical, policy changes, and structural factors have been put forward to explain the decline in labour force participation in Canada in the 1990s. In the first article in the symposium, Pierre Fortin and Mario Fortin attempt to determine the relative importance of these three types of factors by estimating a participation rate equation where the independent variables are an index of job availability (the Help-Wanted Index), the real wage, the real minimum wage, an index of unemployment insurance generosity, real social assistance benefits, and a time trend to capture other structural influences. The equation is estimated for six demographic groups (men and women 15-24, 25-54 and 55 and over) over the 1969-96 period. They find that the drop in the aggregate participation rate in the 1990s was equally due to the three factors: poor macroeconomic conditions, policy changes in unemployment insurance and the minimum wage, and structural transformations. The explanatory power of the equations is found to be good for the younger and middle-age groups, but poor for the older groups. The equations show no significant shift over the 1990-96 sub-period, implying that the decline in the participation rate in the 1990s should not be attributed to a new structural relationship. In terms of the variables, the authors find that young people, and to a less extent, middle-aged persons, respond positively to cyclical variations in job opportunities, but older persons do not; minimum wages affect negatively the labour force participation of the younger age groups and middle-aged women; UI generosity affects positively only youth participation; and social assistance affects negatively the participation of middle-aged women. The authors use their equations to simulate the impact of changes in cyclical, policy, and structural variables on labour force participation of the six groups in the 1990-97 period. The model can account for 2.6 percentage points of the total 2.7 percentage point decline in the aggregate participation rate between 1989 and 1997. Reduced job availability was responsible for 37 per cent of the decline, increases in the real minimum wage 15 per cent, decreased UI generosity 19 per cent, falls in social assistance benefits made a 4 per cent negative contribution to the decline in participation, and structural factors accounting for the remaining 30 per cent of the decline. These structural factors included rising school attendance, the changing roles of men and women in society, the changing demand and supply of skills, the expansion of public pension plans, and the rising average age of the 55 and over group. The simulations explained quite well the evolution of labour force participation for all groups except older males. Perhaps surprisingly, none of the large decline in participation of this group was found to be due to reduced job availability. The finding that only about 40 per cent of the decline in labour force participation in the 1990s is cyclical has important implication for the path of potential output. The authors find that whatever the value of the non-accelerating inflation rate of unemployment (nairu), in a non-inflationary cyclical recovery, the participation rate is unlikely to rise more than 0.8 percentage points from the 1997 level of 64.8 per cent.Labour Force Participation, Labor Force Participation, Participation Rate, Labour Force Participation Rate, Labor Force Participation Rate, Canada, Output Gap, Potential Employment, Potential Output, Potential Growth, Forecast, Simulation

Suppression of decoherence in a generalization of the spin-bath model

The works on decoherence due to spin baths usually agree in studying a one-spin system in interaction with a large spin bath. In this paper we generalize those models by analyzing a many-spin system and by studying decoherence or its suppression in function of the relation between the numbers of spins of the system and the bath. This model may help to identify clusters of particles unaffected by decoherence, which, as a consequence, can be used to store quantum information.Comment: 18 pages, 7 figure

The effect of random coupling coefficients on decoherence

The aim of this letter is to analyze the effect on decoherence of the randomness of the coupling coefficients involved in the interaction Hamiltonian. By studying the spin-bath model with computer simulations, we show that such randomness greatly improves the "efficiency" of decoherence and, then, its physical meaning deserves to be considered.Comment: 4 pages, 5 figure

Une comparaison des taux d’imposition implicites des services du logement locatif et du logement occupé par son propriétaire

En ne taxant pas le rendement implicite du capital investi dans un logement occupé par un propriétaire et en exonérant le gain en capital réalisé sur une résidence principale, le système fiscal subventionne implicitement les logements occupés par leur propriétaire. Par ailleurs, les locataires bénéficient ultimement des avantages fiscaux accordés au logement locatif et en particulier du taux d’imposition plus faible des gains en capital et de la déduction pour coût en capital supérieure à la dépréciation physique. Les simulations montrent que si le taux d’endettement du logement est faible, il est plus avantageux d’être propriétaire. L’avantage fiscal relatif de la propriété résidentielle s’accroît avec les taux réels d’intérêt mais diminue avec l’inflation. La popularité des logements en copropriété pourrait ainsi résulter de la baisse du taux d’inflation et de l’augmentation des taux réels d’intérêt observés depuis la fin de la grande récession.The tax system implicitly subsidizes owner-occupants by not taxing the imputed rent produced by the housing capital as well as the capital gain realized on owner-occupied houses. The renters also benefit from the tax system due to the lower tax rate on capital gain and to the capital cost allowance which is greater than the physical depreciation of capital. Simulations show that if the indebtedness rate is low, it is advantageous to be owner-occupant. The tax advantage of owner-occupied housing is an increasing function of real interest rates but a decreasing function of the inflation rate. The popularity of condominiums could then result from the decrease in the inflation rate and the rise in real interest rates observed since the great recession