LCERPA's 2013 Working Papers are listed below.
Other years:   Current   2014   2013   2012   2011   2010   2009   2008

Published and forthcoming journal articles

Ariizumi, H., A. Sen and N. DeSousa. 2014. ``Evaluating the Relationship between Pay and Research Productivity: Panel Data Evidence from Ontario Universities,'' Canadian Public Policy, 40(1), pp. 1-14.

Boeringer, C., N. Rivers, T. Rutherford, and R. Wigle. Forthcoming. "Sharing the burden for climate change mitigation in the Canadian federation." Canadian Journal of Economics.

Bohl, Martin T., A.C. Klein, P.L. Siklos. 2014. "Short-selling bans and institutional investors' herding behaviour: Evidence from the global financial crisis." International Review of Financial Analysis, Vol. 33, May 2014, 262-269.

Dhyne, E. and J. Konieczny. 2014. Aggregation and the Staggering of Price Changes Economic Inquiry, 52(2), 732-756.

Dhuey, E. and J. Smith. 2014. "How Effective are School Principals in the Production of Student Achievement?" Canadian Journal of Economics, Vol. 47, Issue 2, May/mai 2014, 634-663.

Huang, H., K. Pang, and Y. Tang. 2014. "The Effects of Exchange Rates on Employment in Canada." Canadian Public Policy, 40(4), December 2014, 339-352.

Humphreys, B., L. McLeod, and J. Ruseski. 2014. Physical activity and health outcomes: evidence from Canada. Health Economics 23(1), 34-55.

Feldman, N.E. and B.J. Ruffle. Forthcoming. The Impact of Including, Adding and Subtracting a Tax on Demand. American Economic Journal: Economic Policy,

Fujiki, H. and M. Tanaka, 2014. "Currency demand, new technology, and the adoption of electronic money: Micro evidence from Japan" Economics Letters, volume 125(1), October 2014, pp 5-8.

McLeod, L. Forthcoming. "The association between physician supply and the mix of generalist and specialist services used." Contemporary Economic Policy.

Ruffle, B.J., and Y. Tobol. 2014. Honest on Mondays: Honesty and the temporal separation between decisions and payoffs. European Economic Review, 65, 126-135.

Ruffle, B. J. and Z. Shtudiner. Forthcoming "Are Good-Looking People more Employable?" Management Science, (published online May 29, 2014).

Schirle, T. Forthcoming. The effect of universal child benefits on labour supply. Canadian Journal of Economics.

Shiamptanis, C. Forthcoming. Risk assessment under a nonlinear fiscal policy rule. Economic Inquiry.

Siklos, P. 2014. "Communications Challenges for Multi-Tasking Central Banks: Evidence, Implications" International Finance, Vol. 17(1), Spring 2014, 77-98.

Wilson,L, Y.W. Wu, and S. Prejean. 2014. Are the Bailouts of Wall Street Complements or Substitutes? Atlantic Economic Journal March 2014, Volume 42, Issue 1, pp 21-38.

LCERPA Working Papers - 2014

B. McCaig and N. Pavcnik. 2014. Export Markets and Labor Allocation in a Low-Income Country NBER Working Paper No. 20455.

Abstract. We study the effects of an export shock on labor allocation across household businesses and employers in the formal enterprise sector in a low-income country, Vietnam. We find that workers reallocate from household businesses to employers in the formal enterprise sector, with greater reallocation in industries that experience larger declines in U.S. tariffs on Vietnamese exports due to the United States-Vietnam Bilateral Trade Agreement. The reallocation is greater for workers in more internationally integrated provinces and in younger cohorts. Labor productivity of household businesses is relatively low, so our findings suggest this reallocation increases aggregate labor productivity.

B.J. Ruffle and O. Volij. 2014. "First-Mover Advantage in Best-Of-Series: An Experiment Comparison of Role-Assignment Rules." LCERPA Working Paper No. 2014-16, September 2014.

Abstract. Kingston (1976) and Anderson (1977) show that the probability that a given contestant wins a best-of-2k+1 series of asymmetric, zero-sum, binary-outcome games is, for a large class of assignment rules, independent of which contestant is assigned the advantageous role in each component game. We design a laboratory experiment to test this hypothesis for four simple role-assignment rules. Despite significant differences in the frequency of equilibrium play across the four assignment rules, our results show that the four rules are observationally equivalent at the series level: the fraction of series won by a given contestant and all other series outcomes do not differ across rules.

M. Beck, N. Rivers, R. Wigle and H. Yonezawa. 2014. Carbon Tax and Revenue Recycling: Impacts on Households in British Columbia LCERPA Working Paper No. 2014-15, September 2014.

Abstract. This study investigates the distributional implications of the revenue-neutral carbon tax policy in British Columbia. We use a computable general equilibrium (CGE) model of the Canadian economy and disaggregate households into deciles by annual income using data from a large household expenditure survey. Using the model, we find that the existing BC carbon tax is highly progressive even prior to consideration of the revenue recycling scheme, such that the negative impact of the carbon tax on households with below-median income are smaller than that on households with above-median income. We show that our finding is a result of welfare effects of a carbon tax being determined primarily by the source of a households' income rather than by the destination of its expenditures. Finally, we show that the existing revenue recycling scheme is also progressive. Overall, the tax appears to be highly progressive.

M. Beck and R. Wigle. 2014. "Carbon Revenue: Recycling versus Technological Incentives." LCERPA Working Paper No. 2014-14, January 2014.

Abstract. This paper addresses a number of issues about the disposition of the funds generated by the Alberta Specified Gas Emitters Regulation (SGER), focusing on the allocation of funds among three competing broad categories of expenditures: 1. revenue recycling via tax reductions, 2. support for developing new technologies, and 3. support for adoption of existing technologies.

K. Pang and Y. Tang. 2014. "Estimating the International Spillover Effects of the U.S. Economy: the Role of Capital Control and Exchange Rate Policy" LCERPA Working Paper No. 2014-13, September 2014.
For a copy of the paper, please contact the author

Abstract. Monetary policies and macroeconomic conditions of large economies often have spillover effects on small open economies (SOEs). Capital control and fixed exchange regimes are sometimes employed to mitigate the spillover effects. In this paper, we use two empirical approaches to study whether the effects of the U.S. monetary policy and output changes on SOEs are moderated by capital control and exchange rate policies. In the first approach, we estimate the responses of output and interest rates of SOEs to U.S. interest rate and output shocks in a VAR framework and relate the estimated responses to capital control and exchange rate regimes. We find evidence that capital controls and fixed exchange rate regimes reduce the spillover effects of such shocks to the SOEs. Secondly, we take a less-structured approach in which we estimate the partial correlation between output and interest rates of SOEs and those in the US in panel regression settings. The results are similar.

S. Legree, T. Schirle, and M. Skuterud. 2014. "The Effect of Labour Relations Laws on Union Density Rates: Evidence from Canadian Provinces." LCERPA Working Paper No. 2014-12, September 2014.

Abstract. We provide evidence on the potential for reforms in labour law to reverse deunionization trends by relating an index of the favorability to unions of Canadian provincial labour relations statutes to changes in provincial union density rates between 1981 and 2012. The results suggest that shifting every province’s 2012 legal regime to the most union-friendly possible could raise the national union density by up to 7 percentage points in the long run. This effect appears driven by regulations related to the certification of new bargaining units, the negotiation of first contracts and the recruitment of replacement workers. The effects of reform are largest for women, particularly university-educated women employed as professionals in public services. Overall, the results suggest a limited potential for labour relations reforms to address growing concerns about labour market inequality.

L. McLeod and J.A. Johnson. 2014. "Changing the Schedule of Medical Benefits and the Effect on Primary Care Physician Billing: Quasi-Experimental Evidence from Alberta." LCERPA Working Paper No. 2014-11, August 2014.

Abstract. We exploit a quasi-experiment in the province of Alberta, Canada, to identify how changes in the schedule of medical bene fits affected the provision of primary care services to patients with multiple co-morbidities. Speci cally, Alberta introduced a new fee code to compensate physicians for completing a comprehensive annual care plan (CACP) for qualifying patients. During the period of study, primary care physicians could practice in two settings: (i) solo practice; or (ii) primary care networks (i.e., team based care). This paper asks how the policy change affected physician-billing patterns and whether delivery structure affected physician- billing.
    Data come from Alberta's administrative physician claims data, covering the full population of Alberta and all services provided by primary care physicians, for one year before and two years after the policy change. We employ a difference-in-differences methodology and implement a set of robustness checks to control for confounding from other contemporaneous changes that may have occurred in Alberta as well as unobserved physician heterogeneity.
    Our results suggest the new fee code became the sixth most billed code in its first year (totalling $17.9 million), but was billed by only a small proportion of physicians (roughly 2% of physicians accounted for 20% of total billings). The fee code was disproportionately billed by physicians in team-based care (PCNs), and increased the billing of other complementary fee codes by 5%-10% (or roughly $80 million). The results suggest the unintended consequences of a well-intentioned policy can be costly.

W. Morrison and R. Oxoby. 2014. "Loss Aversion in the Laboratory." LCERPA Working Paper No. 2014-10, June 2014.

Abstract. We report the results of a laboratory experiment testing for the existence of loss aversion in a standard risk aversion protocol (Holt and Laury, 2002). In our experiment, participants earn and retain money for a week before using it in an incentivized risk preference elicitation task. We find loss aversion, distinct from risk aversion, has a significant effect on behavior resulting in participants requiring higher compensation to bear risk.

S. Dhanjal and T. Schirle. 2014. "Workforce Aging and the Labour Market Opportunities of Youth: Evidence from Canada." LCERPA Working Paper No. 2014-9, June 2014.

Abstract. In this study, we investigate whether an aging workforce affects the job opportunities of youth. Provincial data from the 1976-2013 Labour Force Surveys and a fixed-effects model is used to estimate the effect of the share of the adult male labour force that is aged 55 to 69 on the employment and unemployment rates of men aged 25 to 29. We estimate effects on other labour market outcomes including wages and school enrolment, and other samples of younger men and women. There is no evidence to suggest that a growing share of older workers negatively affects the decisions or outcomes of youth in the labour market. To the contrary, there is weak evidence to suggest an aging population has a positive effect on the labour market outcomes of youth.

H. Huang, K. Pang, and Y. Tang. 2014. "The Effects of Exchange Rates on Employment in Canada." LCERPA Working Paper No. 2014-8, April 2014.
This paper has been accepted for publication in Canadian Public Policy.

Abstract. Under the flexible exchange rate regime, the Canadian economy is constantly affected by fluctuations in exchange rates. This paper focuses on the employment effect of the exchange rate in Canada. We find that appreciations of the Canadian dollar have signi cant effects on employment in manufacturing industries; such effects are mostly associated with the export-weighted exchange rate and not the import-weighted exchange rate. Meanwhile, the exchange rate has little effect on jobs in nonmanufacturing industries. Because the manufacturing sector accounts for only about 10% of the employment in Canada, the overall employment effect of the exchange rate is small. In addition, we quantify the loss of manufacturing employment associated with a boom in the commodity market during which the Canadian dollar tends to appreciate. Our estimates suggest that when commodity prices increase by 15.77% (one standard deviation of annual change in commodity price between 1994 and 2010), Canada's manufacturing employment decreases by 0.8%, about 0.08% of the total employment.

P. Siklos and M. Neuenkirch "How Monetary Policy is Made: Two Canadian Tales" LCERPA Working Paper No. 2014-7, March 2014.

Abstract. This paper examines the policy rate recommendations of the Bank of Canada's Governing Council (GC) and the C.D. Howe Institute's (CDHI) Monetary Policy Council (MPC) since 2003. We find, first, that differences in the median recommendations between the MPC and the GC are persistent but small (i.e., 25 bps). The median MPC recommendation is based on a higher steady state real interest rate. However, the response of the MPC and the GC to output and inflation shocks are, for the most part, comparable. Second, we are also able to examine the individual recommendations for the MPC. Estimates of the determinants of consensus inside the MPC or disagreement with the GC yield some useful insights. For example, disagreements are more likely when rates are proposed to rise than at other times. Equally interesting is the finding that the Bank of Canada conditional commitment on the overnight rate in 2009-10 has a relatively larger restricting impact on the MPC's median recommendation than the GC's target rate.


Abstract. Recent events highlight the importance of understanding the relationship between credit availability and real economic activity. This paper estimates macroeconomic models for Canada to investigate the relationship between changes in non-price lending standards, business loans and output. We allow for the possibility that macroeconomic and financial market conditions in the U.S. affect those in Canada. The responses to financial shocks are dissimilar in both countries. Real time data are also found to have a significant impact on the results. The U.S. and Canada may indeed be likened to 'two solitudes' insofar as the impact of credit conditions is concerned. Differences in the quality of banking standards and supervision of financial institutions, as well differences in the effectiveness of monetary policies in the two countries may partially explain the results.


Abstract. Monetary policy decisions are typically taken after a committee has deliberated and voted on a proposal. However, there are well-known risks associated with committee-based decisions. In this paper we examine the record of the shadow Monetary Policy Council in Canada. Given the structure of the committee, how decision-making takes place, as well as the voting arrangements, the MPC does not face the same information cascades and group polarization risks faced by actual decision-makers in central bank monetary policy councils. We find a considerable diversity of opinion about the recommended future path of interest rates inside the MPC. Beginning with the explicit forward guidance provided by the Bank of Canada market determined forward rates diverge considerably from the recommendations implied by the MPC. There is little evidence that the Bank and the MPC coordinate their future views about the interest rate path. However, it is difficult to explain the basis on which median voter inside the MPC, as well as doves and hawks on the committee, change their views about future changes in policy rates. This implies that there remain challenges in understanding the evolution of future interest rate paths over time.


Abstract. This paper studies the impact of female executives on the performance and risk taking of US banks. With a sample of US banks from 2002 to 2010, we find that the inclusion of female executives increases bank performance after addressing endogeneity and reverse causality issues. We also provide evidence that female executives decrease the risk taking of banks. These results suggest that there is added value to having female executives on the executive team. We also find that a more balanced gender ratio results in a greater impact on bank performance and risk taking. This supports the argument to increase gender diversity in executive level positions for females.


Abstract. The elderly are the most intensive users of healthcare including prescription drugs. Canadian provinces have responded with varying levels of support through senior drug plans that use cost-sharing measures such as co-payments in an attempt to find a sustainable balance between health objectives and budgetary constraints. While provincial co-payments have tended to migrate upwards over time resulting in a greater financial burden for seniors, Saskatchewan deviated from this trend in 2007 by capping its co-payment level. In an effort to provide evidence-based research to the ongoing policy discussion on best-practice approaches for this relatively vulnerable population group, this paper employs a Difference-in-Difference method within a Generalized Linear Model (GLM) to examine the impacts of the Saskatchewan policy change on out-of-pocket expenditure for senior household with a focus on impacts for differing segments of expenditure. The findings suggest the Saskatchewan policy change resulted in a decrease in out-of-pocket expenditures thereby lowering the financial burden for seniors. The results also show the expenditure savings largely accrued to seniors at the higher level of expenditure distribution and the policy change did not result in any significant change for households in the middle and lower quintiles.

Please contact the author at for the paper.

Abstract. This paper explores the effects of price limits on the Chinese A-share stock markets during financial crises. A Logit regression model is estimated to investigate the characteristics of stocks that hit the price limits more frequently under economic turmoil. It is found that the price limit system increased volatility significantly, especially in the downward price movement. Moreover, price limit delays the efficient price discovery for upward and downward price movements. Finally, actively traded stocks with a higher positive correlation with the entire market in the property industry hit the price limits more frequently.

This paper has been accepted for publication in Economic Inquiry.

Abstract. In the aftermath of the recent debt crisis, many countries are implementing nonlinear fiscal policy rules, whereby the government’s responsiveness to debt must strengthen at higher levels of debt. This paper examines how a nonlinear fiscal policy rule affects the possibility of future insolvency in a small open economy. We find that (1) the criteria for a nonlinear fiscal rule to eliminate explosive behavior should be tighter than the ones proposed by Bohn (1998); (2) a country that adopts a nonlinear fiscal rule could substantially reduce the probability of a solvency crisis; (3) a nonlinear fiscal rule allows a country to reduce the possibility of insolvency without large initial responsiveness.

LCERPA Commentaries and Other Analysis

Shadpour, Ela. "Safety Effects of Roundabouts" LCERPA Commentary No. 2014-2, September 2014.

Neill, C. "Is Canada's Labour Force Participation Rate at its Lowest Level in Over a Decade, and Should We Worry About It?." LCERPA Commentary No. 2014-1, August 2014.

Municipal Labour Market Indicators, July 2014. Compiled by C. Neill, Laurier Economics, August 15, 2014.

More research by our members

Milligan, K. and T. Schirle. Forthcoming. "Option Value of Disability Insurance in Canada." in International Social Security (NBER Book Series), David A. Wise (ed.), University of Chicago Press.