Exchange Rate Fluctuations and Labour Market Adjustments in Canadian Manufacturing Industries

Gabriel Bruneau and Kevin Moran

Cahiers de recherche from CIRPEE

Abstract: We estimate the impact of exchange rate fluctuations and other external factors on hours worked and employment in Canada’s manufacturing industries. The analysis is based on a dynamic model of labour demand and the econometric strategy employs a dynamic OLS approach for cointegrating regressions. Our data is drawn from a panel of 20 manufacturing industries, from Statistics Canada’s KLEMS database, and covers a long sample that includes two full cycles of appreciation and depreciation in the value of the Canadian dollar. We find that exchange rate fluctuations have economically and statistically significant effects on the labour choices of Canada’s manufacturing employers, and that these effects are stronger for industries more exposed to trade. In addition, we find that the enactment of NAFTA in 1994 has had a negative impact on labour in manufacturing industries. Finally, we report that employment reacts faster than total hours worked, suggesting that hours worked per employee react in a countercyclical fashion to exchange rate fluctuations.

Keywords: exchange rate fluctuations; manufacturing employment; panel data estimation; cointegration regression (search for similar items in EconPapers)
JEL-codes: E24 F16 F31 J23 (search for similar items in EconPapers)
Date: 2012
New Economics Papers: this item is included in nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.cirpee.org/fileadmin/documents/Cahiers_2012/CIRPEE12-27.pdf (application/pdf)

Related works:
Journal Article: Exchange rate fluctuations and labour market adjustments in Canadian manufacturing industries (2017)
Journal Article: Exchange rate fluctuations and labour market adjustments in Canadian manufacturing industries (2017)
Working Paper: Exchange Rate Fluctuations and Labour Market Adjustments in Canadian Manufacturing Industries (2015)
Working Paper: Exchange Rate Fluctuations and Labour Market Adjustments in Canadian Manufacturing Industries (2012)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:lvl:lacicr:1227

Access Statistics for this paper

More papers in Cahiers de recherche from CIRPEE Contact information at EDIRC.
Bibliographic data for series maintained by Manuel Paradis ().