DDCEE

     An extensive amount of literature has stated that immigrants may exhibit poorer economic performance than native-born citizens. There are three main reasons why this relationship may occur: (1) human capital, such as the education and labour market experiences, may be lower for immigrants, (2) language proficiency tends to be lower among immigrants, and (3) immigrants may have weaker networks or live in areas that consist predominately of one ethnic group, known as enclaves. The purpose of this study is to explore another potential reason why immigrants’ economic performance is lower, specifically, financial literacy. Financial literacy allows agents to make more informed decisions regarding saving, investing, borrowing, etc. Evidence from surveys have documented that there are large variations in financial literacy across demographic characteristics such as gender, education, age, religion, and ethnicity. This project studies whether immigrants in Canada are financially sophisticated by examining whether eligible immigrants take advantage of tax breaks. Higher levels of financial literacy may reflect higher levels of human capital, language proficiency and stronger social networks. Thus, this study will account for, or condition on language, education, and networks (measured by the proximity of businesses or individuals with similar demographics).

The process of how the economic status of immigrants’ changes from the time of their arrival onward, and how they integrate into the labour market can determine what factors lead to improved outcomes. Another area of interest is how the career dynamics of immigrants and natives differ. The purpose of this study is to answer the following questions: (1) how do immigrants sort into different firms as they assimilate and how their networks play a role in this process, and (2) how firm-specific pay policies may affect immigrants and natives differently? While previous Canadian studies that have investigated the economic status of immigrants employ census-type data, this study will use longitudinal matched employer and employee data. This data is particularly useful as the same sample is tracked at different points in time. The study will look at changes in the characteristics of the jobs immigrants sort into as they assimilate. Such characteristics include the ratio of natives to immigrants in the firm and the size of the firm. Schmutte (2015) has shown that individuals whose neighbours are employed at high-paying firms are more likely to move to a firm that is higher-paying. It is of interest to see if this is the case for immigrants. This may distinguish if certain groups of immigrants that live in certain places assimilate faster.

This article takes advantage of new Canadian administrative linked employer-employee data to study the role of employers in explaining changes in inequality along two dimensions. First, we use information about the worker's employer to examine how within-firm and between-firm earning inequality evolved over the past decade. Second, we use firm-level productivity information to shed some light on the evolution of productivity inequality over the last decade. Finally, we interpret these findings in the light of current theories about increasing wage inequality and summarize how these results improve our understanding of the dynamics of productivity dispersion. More precisely, we link the changes in productivity inequality to changes in wage inequality to specifically address the question of how the two are closely connected or not.

Beginning with the work of the economist Joan Robinson in the 1930’s, the word “monopsony" has been used in economics to refer to any market situation in which the buyer of a good possesses market power (i.e. some ability to choose the price at which they buy), regardless of whether or not there is actually only a single such buyer. Although monopsony power may be an important phenomenon in many different contexts, a growing body of research has focused on identifying and quantifying its extent in labor markets. Unfortunately, the existing empirical literature on this topic has thus far not meaningfully addressed one especially significant question, namely: to what extent do firms exploit all of the potential monopsony power available to them in setting the wages of their workers? The goal of our proposed study is to directly explore this question by using the CEEDD to simultaneously estimate both wage markdowns, or reduction of wages below what would be earned in a perfectly competitive market where firms have no wage-setting power, as well as the “full'' markdowns that would be predicted by standard models of an imperfectly competitive labor market, given the labor supply elasticity facing particular firms (a measure of how likely workers are to quit in response to wage cuts). Our hope is that these estimates will allow us to measure not only the average extent to which firms utilize their available wage-setting power, but also to explore heterogeneity in the same and to identify relevant correlates of being a “high-utilization" or “low-utilization" (of monopsony power) firm. We are particularly interested in studying whether firms with governance structures that allow for employee participation, including collective bargaining, are less aggressive monopsonists, as predicted by recent theoretical work on the topic.

We document the importance of secondary markets (i.e., business re-sale) for the growth and establishment of private businesses using administrative matched employer-employee data from Canada. In particular, we quantify the extent of ownership turnover among private firms and identify the characteristics of owners and firms that are most often associated with engaging in such transactions. In addition, by tracking individual firms over time, we document how firm growth responds to the presence of secondary markets and the corresponding impact on industry composition. This project fills a gap in the firm dynamics literature which has so far ignored the role of secondary markets for private businesses.

In this paper, we use linked employer-employe administrative tax data from Canada to estimate the impact of payroll taxes on a variety of firms and workers outcomes. At the firm-level, we use geographic and time variations in tax rates to identify the effect of payroll taxes on wage growth at the worker level. For one province, we exploit a clean overtime change in the payroll tax rate to estimate its impact on the firm's level of employment, average wage and productivity, with difference-in-differences models, taking into account firm-level unobserved heterogeneity. Additionally, taking advantage of the nature of linked data, we estimate wage equations with both fixed worker and firm fixed effects. We find no impact on employment and productivity but significant impacts on wages, implying that payroll taxes are passed almost entirely to workers in the form of lower wages.

The goal of the Global Income Dynamics Database Project is to provide a rich set of statistics on individual income dynamics for several countries, which are harmonized to make them comparable. The key difference between this project and others (for example, the World Income and Wealth Database of Piketty-Saez-Zucman, et al.) is the focus on dynamics (which requires longitudinal data rather than repeated cross-sections), and administrative data (which allows more sophisticated analyses with reduced measurement issues). This project will enable Canada to be a participant in this database along with 10 other countries (Brazil, Denmark, France, Germany, Italy, Mexico, Norway, Sweden, UK, and US). Canada is uniquely positioned to participate given the newly formed matched worker-firm panel data.

This project sets out to investigate the impact of immigrant business ownership and employment on Canada's international trade. We propose to use Canadian Employer-Employee Dynamics database connected with data on imports and exports for the empirical analysis. We propose to quantify the effects of immigrant owned firms and immigrant employees on the extensive and intensive margins of imports and exports for products with different degrees of differentiation. We also plan to extend the analysis to examine whether the contribution of immigrant business ownership to international trade is affected by the cultural/linguistic distance between the country of origin and Canada.

In economic models of trade, it is stated that firms that are more productive will export, while those that are less productive will sell products domestically or completely exit the market. However, differences in productivity alone cannot explain why some firms export and some do not. One aspect that may limit a firms international trading opportunities is a lack of information regarding such opportunities, or a lack of assurance that trading agreements will be honoured. Members of migrant networks may play a role in overcoming such barriers by acting as mediators between the firm and potential trading partner. The objective of this research is to (1) determine the relationship between firms that export and the composition of their employees, and (2) how the Canadian immigration policy has shaped a firm’s ability to export. Specifically, this paper will explore if firms with foreign-born workers are more likely to export, if firms make hiring decisions based on the possibility of exporting, and if there is any evidence to suggest firms hire foreign-born workers to mitigate the information barriers discussed above.

Recent studies have indicated that the gains to shareholders from mergers and acquisitions (M&As) are a result of layoffs that occur post-merger. After an M&A, the firm undergoes restructuring. In this process, it is likely that some of the workforce at the combined firm may be laid off. While the wealth effects of shareholders are well documented, those of employees are not, especially in the Canadian context. The purpose of this study is to examine the well-being and wealth effect of workers that are employed at merged firms. Specifically, this study hopes to answer the following: (1) what is the effect on the level of employment after an M&A (2) what are the demographics (ex. age, gender, job skill level, family status) of terminated employees and (3) what are the future employment characteristics of such workers (i.e., type, earnings, sector, and location)?

Additional data set: Record of Employment (ROE)

This project investigates to what extent individual learning/experience and employment match quality affect firm creation (new entrepreneurship) and firm survival. Learning and experience is a proxy for the quantity of entrepreneurial human capital, and employment match quality is a proxy for the quality of such human capital. New entrepreneurship as an occupational choice is the outcome of accumulation of the entrepreneurial human capital, meanwhile,  this human capital as an initial condition may also affect the firm exit decision. To this end, we incorporate learning/experience and employment match quality into a dynamic model of occupational choice (i.e., switching between being an employee and being a business owner) using the matched employee-employer data CEEDD. The project also offers insights on the relative importance of financial wealth and entrepreneurial human capital in business formation.

This project examines the role that firms play in the economic assimilation of new immigrants to Canada. Because some firms pay more than others (even after conditioning on a worker's skill), two identical individuals working at different firms may be paid differently. The tendency of new immigrants to be employed at low-paying firms, and their propensity to move out of these firms, has important implications for their long-term economic success. This project analyzes the characteristics of firms who tend to employ immigrants, and most importantly, those that hire immigrants directly from abroad. This project speaks to the policy debate on the degree to which employers should be directly involved in immigrant selection in Canada.

In this project, we will advance the findings of each of these papers by looking in detail at how workers move over their life course, examining in particular how multiple aspects of industrial change impact mobility. The analysis for this proposed research will draw on the Canadian Employer-Employee Dynamics Database (CEEDD), which contains rich data on both individual and firm-level characteristics that may motivate migration for close to two decades.

While there is a large body of literature studying the impact of minimum wages on employment, there is less research into how minimum wages affect firms. Minimum wages increase the cost of paying workers to firms. This gives firms a strong incentive to look for efficiencies, such as increasing performance standards or asking for greater proficiency in job duties. If workers can accomplish more in the same amount of time, they justify their pay increases; if this happens on large enough scale, the result is higher firm productivity. We will study minimum wage increases in Canada from 2001 to 2015 and explore whether these increases resulted in higher firm productivity.

Starting a business is risky because many businesses fail. Unsuccessful entrepreneurs may lose some of the money they invest, they may lose income by giving up a job in order to start the business, and after their business fails, they may not be able to find as high-paying a job as they had before. How important are these different losses for Canadian entrepreneurs? This project seeks to understand how these different risks discourage people with good ideas from starting businesses. By better understanding these risks, we can create public policy to more effectively encourage people to become entrepreneurs.