MONTREAL, Nov. 07, 2024 (GLOBE NEWSWIRE) -- The expansion of the Quebec government during the Quiet Revolution had no significant impact on the living standards of Quebecers, shows a new MEI publication based on economic modelling.
“The idea that the growth of the government allowed Quebecers to get richer in the 1960s has a particularly strong hold on our collective psyche,” says Vincent Geloso, senior economist at the MEI and co-author of the study. “However, by putting it to the test, we find that while the Quebec population did indeed get richer during this period, it wasn’t due to the expansion of government.”
Between 1960 and 1975, the wealth gap between Quebec and Ontario shrank by between 6.8 and 9.7 percentage points.
In order to test the effects of the growth of the Quebec government during this period, the researchers used a method known as “synthetic controls,” grouping together a mix of different indicators for five Canadian provinces.
The indicators selected were real GDP per worker, real GDP per capita, size-adjusted household income, real hourly wages, life expectancy at birth, school enrollment rate, average years of total schooling, and size of government.
The researchers tested the validity of this control by comparing the performance of this synthetic Quebec to that actually observed in Quebec, for a period of 15 years before the Quiet Revolution. The variations of the different components of the model corresponded to those observed in Quebec during the same period.
“Basically, what this method allows us to do is observe how Quebec would have evolved without the Quiet Revolution, and compare it to what actually happened in order to isolate causes,” explains Mr. Geloso.
By observing the difference between the performance of the synthetic model and the performance actually observed in Quebec between 1960 and 1975, the researchers were able to measure the effects that were attributable to the Quiet Revolution.
The results show that the expansion of government in this period did not have a statistically significant effect on real GDP per capita, household income, or hourly wages for Quebecers.
The only measurable positive effects were a 40-day increase in life expectancy and an increase of 0.91 years of schooling. This latter effect was entirely attributable to a modification of the Education Act, extending by a year the minimum age for leaving school in the early 1960s.
The most notable impact is the increase in the size of the government, which by 1975 was taking up 4.7 percentage points more space in the Quebec economy than it otherwise would have.
“Other than the increase in the size of the government, it does not seem that the Quiet Revolution had very large effects on the well-being of Quebecers,” notes Mr. Geloso. “While Quebec really did catch up economically, this was more likely due to the creativity and ingenuity of Quebecers than to government intervention.”
The MEI study is available here: https://www.iedm.org/wp-content/uploads/2024/11/lepoint132024_en.pdf
The MEI is an independent public policy think tank with offices in Montreal, Calgary, and Ottawa. Through its publications, media appearances, and advisory services to policymakers, the MEI stimulates public policy debate and reforms based on sound economics and entrepreneurship.
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