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Changes in wage inequality in Canada: An interprovincial perspective

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  • Nicole M. Fortin
  • Thomas Lemieux

Abstract

This paper uses the Canadian Labour Force Survey to understand why the level and dispersion of wages have evolved differently across provinces from 1997 to 2013. The faster increase in the level of wages and the decline in wage dispersion in Newfoundland, Saskatchewan and Alberta are the starkest interprovincial differences. We find that they are accounted for by the growth in the extractive resources sectors, which benefited less‐educated and younger workers the most. Increases in minimum wages since 2005 are found to be the main reason why wages at the very bottom grew more than those in the middle of the distribution. Cet article utilise l'Enquête de la population active canadienne pour étudier les différences interprovinciales dans l'évolution du niveau et de la dispersion des salaires de 1997 à 2013. Les différences les plus remarquables sont l'augmentation beaucoup plus rapide de la croissance des salaires et la baisse de la dispersion salariale à Terre‐Neuve, en Saskatchewan et en Alberta. Ces différences sont reliées à la croissance du secteur des ressources extractives dont les travailleurs moins instruits et plus jeunes ont tout particulièrement bénéficié. Nous constatons également que l'augmentation des salaires minimums provinciaux depuis 2005 constitue la raison principale pour laquelle les salaires au bas de la distribution ont augmenté plus que les salaires médians.

Suggested Citation

  • Nicole M. Fortin & Thomas Lemieux, 2015. "Changes in wage inequality in Canada: An interprovincial perspective," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 48(2), pages 682-713, May.
    • Handle: RePEc:wly:canjec:v:48:y:2015:i:2:p:682-713
    DOI: 10.1111/caje.12140
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    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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