The Economic Impact of Labour Standards

In this study, we estimate the effects of Canadian provincial labour standards (standards related to job security, working hours and wages) using a panel data set over the 1976 to 2008 period on six components of economic performance: employment rates of different groups (15-19 years, 20-24 years, 25-54 years and 15 years and older), work intensity (hours worked annually per job) and labour productivity (real GDP per hour worked). Our results show that several labour standards have statistically significant effects on employment rates, notably the effects of standards regarding advance notice in the event of dismissal. We also obtain a weak statistically significant effect of the minimum wage on the employment rate of the 15 years and older employees. Very few statistically significant effects are obtained from the estimation of the work intensity and labour productivity equations. Overall, our results do not support a major reform of labour standards in Canada, at least for the standards considered here.