Project Link: Piecing together recent Canadian economic history

I've already ranted a couple of times - here and here - about Statistics Canada's 'Attention Deficit Disorder': its habit of starting new time series using new methodologies without updating the historical data. As I put it in my first rant,

Statistics Canada must be the only statistical agency in the world where the average length of a data series gets shorter with the passage of time. Its habit of killing off time series, replacing them with new, 'improved' definitions and not revising the old numbers is a continual source of frustration to Canadian macroeconomists.

But of course ranting about the problem isn't the same thing as solving it. I kept thinking of this old Peanuts cartoon:

So I decided to light a candle.

I've started Project Link, whose goal is to take the fragments of data published by Statistics Canada and piece them together into a coherent whole. I've started with monthly data, focusing on the main concurrent indicators: GDP, employment (LFS and SEPH), unemployment rates, weekly earnings (SEPH), the CPI, manufacturing sales, exports, imports and retail trade. SEPH data go back to 1950 and 1951, and the LFS goes back to when the monthly survey started in 1953.

I've put together a few charts, and I might as well show them to you. Here are real weekly earnings going back to 1950:

We're all aware of pieces of this story - the post-war boom, the long period of stagnation during the 1970s, 1980s and 1990s and the recent resource boom - but this is the first time I've seen it all in one chart.

And here is the unemployment rate:

Anyone know the story of what was going on during the Diefenbaker years?

And there are other tidbits that one stumbles across while looking through microfiches of discontinued Statistics Canada publications. For example, I found this in the August 1962 issue of The Labour Force:

This surprised me. I thought that the surge in female labour force participation rates started in the 1960s and the 1970s, but it looks like it began in the early 1950s. My next priority is to break out the old LFS data by gender.

So there you are. I'll be updating the data from time to time, but since the series are all scaled to be consistent with the current series, you can update them yourself from Cansim.

Comments

[Frances Woolley]

STeve, these are great, thank you.

On the female labour force participation - there's a lot of research now suggesting that one of the big drivers of increased female labour force participation was electrification and household appliances. "Engines of liberation" is the title of one paper - basically the idea is that washing machines and electric irons and modern stoves and running water and central heating freed women's time and enabled them to enter the labour force. So, yes, the increase in FLFP actually happened throughout the 20th century.

[Jamie Carson]

Even population has a series break. Annoying to piece together two series for a denominator (in per capita measures).
Very pleased to see this.

[Nick Rowe]

Kudos Stephen.

The first chart still puzzles and surprises me.

"Anyone know the story of what was going on during the Diefenbaker years?"

The Coyne Affair. I think that's when the Bank of Canada tightened to prevent inflation. Don't remember the details.

[Nick Rowe]

Thinking more about your first chart, on wages. My first thought was women's participation rate increasing labour supply preventing wages from growing (or a labour force composition effect). But as your last pictures show, the timing is totally wrong for that story to work. And since women's participation rate was such a big deal for labour supply, the failure of that particular labour supply story makes me doubt *any* labour supply story of your first chart. I now think it must be a labour demand story, with a very elastic labour demand curve shifting up over time, then pausing, then shifting again. But what particular labour demand story.....?

[Jacques René Giguère]

For those who have not seen it
http://www.statcan.gc.ca/pub/75-006-x/2016001/article/14651-eng.htm
on women e,U,P rates Canada vs US

[Majromax]

> I now think it must be a labour demand story, with a very elastic labour demand curve shifting up over time, then pausing, then shifting again. But what particular labour demand story.....?

Productivity effects? Would a graph of rGDP / hour worked look similar over this period? The story of the 80s and 90s was along the lines of Canada as a branch-plant economy, but that's awfully vague and the period spans the Trudeau, Mulroney, and Chrétien governments.

[John Chant]

Good work Steve.

The Diefenbaker years were, as Nick pointed out, when the Coyne affair occurred. But inflation was pretty slight. In only one year did it exceed 3% and in another 2%, otherwise it was between 1 and 2%

Coyne was concerned that the government was living beyond its means. He tried to offset the easy fiscal policy with a tight monetary policy. The effect, of course, with a flexible exchange rate was a high C$ with its depressing impact on income and unemployment which rose from 4.4% in 1956 to over 7% in 1958, 1960 and 1961.

Many of Canada's economists headed by Carleton's Scott Gordon reacted by publishing the manifesto "Economists Against the Bank of Canada."

The Canadian experience at this time probably inspired Mundell to develop in his approach to policy assignment under fixed and flexible exchange rates.

[Livio Di Matteo]

A very worthwhile project Stephen!

[David R. Henderson]

Thanks for that bit of history, John Chant. It rang a dim bell in my head.