The Impact of Internal Trade Liberalizations on Plant Productivity and Markups. (PDF)
I estimate the effects of two Canadian internal trade liberalizations on plant-level productivity, markups, and exports. In particular, I examine the New West Partnership and Trade Agreement (NWPTA) and the Trade and Cooperation Agreement (TCA), both of which sought to reduce or remove prohibitive, technical and administrative barriers to trade across provinces. Employing a control function approach, I use Canadian manufacturing data to estimate plant-level total factor productivity and markups for 2004-2012. Then, using difference-in-differences methods, I find that the NWPTA increased the likelihood that a plant exports interprovincially, increased the share of output that plants sell to other provinces, increased plant-level total factor productivity but had no significant impact on plant-level markups. The agreement raised the average plant's productivity by 1.97 percent across all post-treatment years. In contrast, the TCA had no significant impact on plant-level productivity or export behavior, but was associated with a a small increase in markups. The NWPTA has demonstrated considerable advantages in plant performance over the TCA, which has important implications for the structuring of internal trade agreements. Notably, the NWPTA's negative-list approach allows for broader coverage compared to the TCA's positive-list method. Additionally, the NWPTA has made greater strides in mutually recognizing worker certifications and business registrations, as well as in harmonizing business standards across provinces, making it a more effective agreement overall.
A Gravity Analysis of Inter-Provincial Trade, with Beverly Lapham. (PDF)
In this paper, we provide evidence of frictions associated with trade in goods and services among Canadian provinces. We examine empirical relationships between sector- and industry-level trade flows and relative trading frictions associated with intra-provincial trade, inter-provincial trade, and international trade. We develop a novel method for estimating the magnitude of differences across provinces, industries, and time concerning inter-provincial trade frictions. We achieve this by using the multilateral resistance terms present in the structural gravity system to construct an index summarizing the effects of trade frictions compared to a frictionless benchmark. We find that the ranking of these relative inter-provincial frictions across provinces and the degree of regional dispersion varies considerably across the sectors and industries we study. In addition, we find considerably more geographic dispersion in the frictions that provinces face as sellers of goods and services than in those they face as buyers. Finally, we evaluate quantitative associations between two Canadian inter-provincial regional trade agreements and inter-provincial trade flows for a variety of industries. We document considerable variation across sectors and manufacturing sub-industries in our estimates of the relationships between these provincial trade agreements and trade flows. For example, trade agreements signed among western provinces around 2010 are positively associated with trade flows in the mining sector, textiles, petroleum, and transportation equipment, but are negatively associated with trade flows in agricultural goods and manufactured food products.
Immigrant Assimilation in Canada, 1901-1921, with Ian Keay. (PDF)
In this paper we use newly digitized complete-count samples from the 1901 and 1921 Canadian population censuses to estimate annual earnings penalties for newly arrived immigrants, and immigrant assimilation rates. The 100% samples are much broader and deeper than the evidence that was available to earlier researchers who studied assimilation in Canadian labour markets, and unlike in the United States, early twentieth century Canadian censuses record individuals’ annual earnings. We compare native and foreign born earnings using cross sections from the 1901 and 1921 censuses, pooled cross sections from 1901 and 1921, and a panel of individuals who have been linked between 1901 and 1921. We find that during the early twentieth century, the average immigrant faced a significant earnings penalty in Canadian labour markets upon arrival, and this penalty was persistent – lasting up to 19 years. The micro-data available in the censuses allow us to explore heterogeneity in immigrants’ assimilation experiences along multiple dimensions. Foreign born workers’ age-earnings profiles varied depending on the labour market in which they settled, their country of origin, occupation, and arrival cohort. This last dimension – variation in assimilation by year of arrival – illustrates the impact of differences immigrant self-selection and temporary migration over time. Using estimates derived from permanent migrants who can be linked between 1901 and 1921, we find that after controlling for sample selection arising from our linking procedure, initial earnings penalties and slow assimilation rates should not be entirely attributed to changes in immigrant self-selection and temporary migration.
The "Last Best West": The Economic Impact of Mass Migration and Settlement Patterns in 20th Century Canada. (PDF)
I examine the effects of European-origin migration to Canada during the mass migration period from 1911 to 1921, using Canadian decennial census data to address two key questions in immigration economics. First, I analyze the impact on the receiving labor market and find that increased immigrant concentration within a census subdivision led to a decrease in the annual earnings of natives. Second, I investigate the rate of economic assimilation among these new migrants and how their unique settlement patterns influenced earnings convergence with natives. My findings reveal that immigrants who settled in Western Canada achieved earnings convergence with natives a decade sooner than those in Eastern Canada, where a persistent earnings gap lasted over 30 years—a difference I largely attribute to the distinct settlement patterns in Western Canada.
Labor Mobility and Wage Responses to an Internal Trade Liberalization: Evidence from Canada