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Gender Composition and Wages: Why Is Canada Different from the United States?

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  • Michael Baker
  • Nicole M. Fortin

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Abstract

The correlation of occupational gender composition and wages is the basis of pay equity/comparable worth legislation. A number of previous studies have examined this correlation in US data, identifying some of the determinants of low wages in female jobs, as well as important limitations of public policy in this area. There is little evidence, however, from other jurisdictions. This omission is particularly disturbing in the case of Canada, which now has some of the most extensive pay equity legislation in the world. In this paper, we provide a comprehensive picture, circa the late 1980's, of the occupational gender segregation in Canada and its consequences for wages. We also draw explicit comparisons of our findings to evidence for the United States. We find that the link between female wages and gender composition is much stronger in the United States than in Canada, where it is generally small and not statistically significant. The relatively more advantageous position of women in female jobs in Canada is found to be linked to higher unionization rates and the industry-wage effects of public goods sectors. La corrélation négative entre le taux de féminité des occupations et les salaires horaires sert de fondement aux politiques d'équité salariale basées sur le principe du salaire égal pour un travail de valeur comparable. La plupart des études antérieures ont évalué cette corrélation à l'aide de données américaines. Ces études ont cherché à identifier les facteurs qui expliquent les bas taux de salaires des occupations féminines, de même que les facteurs pouvant réduire l'efficacité des politiques publiques dans ce domaine. Cependant, il y a peu de recherches empiriques provenant d'autres juridictions. Cette omission est particulièrement troublante dans le cas du Canada, où l'application des lois d'équité salariale est parmi les plus vastes au monde. Dans cet article, nous cherchons d'abord à combler cette omission en donnant une image complète de la ségrégation occupationnelle basée sur le sexe au Canada et de ses conséquences sur les salaires horaires à la fin des années 80. Nous faisons aussi des comparaisons précises avec la situation qui prévaut aux États-Unis. Nos résultats indiquent que la corrélation entre le taux de féminité des occupations et les salaires des femmes est beaucoup plus forte aux États-Unis qu'au Canada, où elle est généralement faible et n'est pas statistiquement significative. La position relativement plus favorable des femmes qui occupent des emplois féminins au Canada est reliée à leur taux de syndicalisation plus élevé de même qu'aux effets fixes industrie-salaires plus élevés des secteurs qui fournissent des biens publics.

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Bibliographic Info

Paper provided by CIRANO in its series CIRANO Working Papers with number 98s-34.

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Date of creation: 01 Nov 1998
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Handle: RePEc:cir:cirwor:98s-34

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Keywords: Pay equity; comparable worth; discrimination; gender composition; occupational segregation; unions; cross-country comparison; Équité salariale; salaire égal pour travail de valeur comparable; discrimination; taux de féminité; ségrégation occupationnelle; syndicat; comparaisons internationales;

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References

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  1. Denise J. Doiron & W. Craig Riddell, 1994. "The Impact of Unionization on Male-Female Earnings Differences in Canada," Journal of Human Resources, University of Wisconsin Press, vol. 29(2), pages 504-534.
  2. John DiNardo & Nicole M. Fortin & Thomas Lemieux, 1995. "Labor Market Institutions and the Distribution of Wages, 1973-1992: A Semiparametric Approach," NBER Working Papers 5093, National Bureau of Economic Research, Inc.
  3. Johnson, George & Solon, Gary, 1986. "Estimates of the Direct Effects of Comparable Worth Policy," American Economic Review, American Economic Association, vol. 76(5), pages 1117-25, December.
  4. Macpherson, David A & Hirsch, Barry T, 1995. "Wages and Gender Composition: Why Do Women's Jobs Pay Less?," Journal of Labor Economics, University of Chicago Press, vol. 13(3), pages 426-71, July.
  5. Moulton, Brent R., 1986. "Random group effects and the precision of regression estimates," Journal of Econometrics, Elsevier, vol. 32(3), pages 385-397, August.
  6. Reilly, K.T. & Wirjanto, T.S., 1998. "Does More Mean Less? The Male/Female Wage Gap and the Proportion of Female at the Establishment Level," Papers 98-04, Centre for Labour Market and Social Research, Danmark-.
  7. Riddell, W.C., 1993. "Unionization in Canada and the United States: A Tale of Two Countries," Papers 1993-1, Queen's at Kingston - Sch. of Indus. Relat. Papers in Industrial Relations.
  8. William J. Carrington & Kenneth R. Troske, 1995. "Gender Segregation in Small Firms," Journal of Human Resources, University of Wisconsin Press, vol. 30(3), pages 503-533.
  9. Mark R. Killingsworth, 1990. "The Economics of Comparable Worth," Books from Upjohn Press, W.E. Upjohn Institute for Employment Research, number ecw.
  10. Juhn, Chinhui & Murphy, Kevin M & Pierce, Brooks, 1993. "Wage Inequality and the Rise in Returns to Skill," Journal of Political Economy, University of Chicago Press, vol. 101(3), pages 410-42, June.
  11. Kenneth R Troske & William J Carrington, 1992. "Gender Segregation Small Firms," Working Papers 92-13, Center for Economic Studies, U.S. Census Bureau, revised May 1993.
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Cited by:
  1. Michael Baker & Nicole Fortin, 2000. "Comparable Worth Comes to the Private Sector: The Case of Ontario," Econometric Society World Congress 2000 Contributed Papers 0266, Econometric Society.
  2. Nicole M. Fortin & Michael Baker, 1999. "Women's Wages in Women's Work: A U.S./Canada Comparison of the Roles of Unions and "Public Goods" Sector Jobs," American Economic Review, American Economic Association, vol. 89(2), pages 198-203, May.

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