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Comparable Worth Comes to the Private Sector: The Case of Ontario

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  • Michael Baker

    (University of Toronto)

  • Nicole Fortin

    (University of British Columbia)

Abstract

We investigate the effect of pro-active comparable worth legislation, covering both the public and private sectors, on wages, employment and the gender gap. Our focus is the pay equity initiative adopted by the Canadian province of Ontario in the early 1990s. Our preliminary finding is that the law fell short of its goal of reducing gender based wage differentials.Firm surveys indicate that the effect of the legislation was blunted by lack of compliance in small private firms, the low incidence of undervalued female work in larger firms, and more generally the lack of male comparators for female jobs. These sorts of problems would appear endemic to any attempt to extend comparable worth to the private sector of a decentralized labor market. Our analysis of individual level data, which uses difference--in--difference models, kernel regressions and kernel density estimations, suggests that even in those sectors where the legislation had ``bite'' (among non-unionized workers in larger establishments), any positive effects on the wages of females in female jobs were very modest. Our most consistently estimated effects of the law on wages are negative: slower wage growth for females in male jobs and for males in female jobs.

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Bibliographic Info

Paper provided by Econometric Society in its series Econometric Society World Congress 2000 Contributed Papers with number 0266.

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Date of creation: 01 Aug 2000
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Handle: RePEc:ecm:wc2000:0266

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  1. Joshua Angrist & Alan Krueger, 1998. "Empirical Strategies in Labor Economics," Working Papers 780, Princeton University, Department of Economics, Industrial Relations Section..
  2. 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.
  3. 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-.
  4. Kimberly Bayard & Judith Hellerstein & David Neumark & Kenneth Troske, 2003. "New Evidence on Sex Segregation and Sex Differences in Wages from Matched Employee-Employer Data," Journal of Labor Economics, University of Chicago Press, vol. 21(4), pages 887-922, October.
  5. Bruce D. Meyer, 1994. "Natural and Quasi- Experiments in Economics," NBER Technical Working Papers 0170, National Bureau of Economic Research, Inc.
  6. Ehrenberg, Ronald G & Smith, Robert S, 1987. "Comparable-Worth Wage Adjustments and Female Employment in the State and Local Sector," Journal of Labor Economics, University of Chicago Press, vol. 5(1), pages 43-62, January.
  7. Michael Baker & Nicole M. Fortin, 1998. "Gender Composition and Wages: Why is Canada different from the United States?," Working Papers baker-98-02, University of Toronto, Department of Economics.
  8. Mattila, J. Peter & Orazem, Peter, 1990. "The Implementation Process of Comparable Worth: Winners and Losers," Staff General Research Papers 10842, Iowa State University, Department of Economics.
  9. Robert S. Smith, 1988. "Comparable worth: Limited coverage and the exacerbation of inequality," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 41(2), pages 227-239, January.
  10. Erica L. Groshen, 1991. "The Structure of the Female/Male Wage Differential: Is It Who You Are, What You Do, or Where You Work?," Journal of Human Resources, University of Wisconsin Press, vol. 26(3), pages 457-472.
  11. Mark R. Killingsworth, 1990. "The Economics of Comparable Worth," Books from Upjohn Press, W.E. Upjohn Institute for Employment Research, number ecw, December.
  12. 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.
  13. 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.
  14. O'Neill, June & Brien, Michael & Cunningham, James, 1989. "Effects of Comparable Worth Policy: Evidence from Washington State," American Economic Review, American Economic Association, vol. 79(2), pages 305-09, May.
  15. 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.
  16. repec:fth:prinin:401 is not listed on IDEAS
  17. Rapaport, Carol, 1995. "Apparent Wage Discrimination When Wages Are Determined by Nondiscriminatory Contracts," American Economic Review, American Economic Association, vol. 85(5), pages 1263-77, December.
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Cited by:
  1. Michael Baker & Nicole M. Fortin, 2001. "Occupational gender composition and wages in Canada, 1987-1988," Canadian Journal of Economics, Canadian Economics Association, vol. 34(2), pages 345-376, May.
  2. Mark Cassidy & Eric Strobl & Robert Thornton, 2002. "Gender Pay Differentials and Equality Legislation in the Republic of Ireland," Canadian Public Policy, University of Toronto Press, vol. 28(s1), pages 149-169, May.

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