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Does Comparable Worth Work in a Decentralized Labor Market?

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  • Michael Baker
  • Nicole M. Fortin

Abstract

We investigate the effect of pro-active comparable worth legislation---covering both the public and private sectors---on wages, the gender wage gap and the gender composition of employment. The focus is the pay equity initiative of the Canadian province of Ontario in the early 1990s. We document substantial lapses in compliance and problems with the implementation of the law among smaller firms where the majority of men and women work. This evidence provides important lessons of the obstacles to extending pay equity to the private sector of a decentralized labor market. When we focus on those sectors of the labor market where compliance was relatively strict, our results suggest that any positive effects on the wages of women in female jobs were very modest. Our most consistently estimated effects of the law on wages are negative: slower wage growth for women in male jobs and for men in female jobs.

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Bibliographic Info

Paper provided by University of Toronto, Department of Economics in its series Working Papers with number baker-00-02.

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Length: 51 pages
Date of creation: 11 Apr 2000
Date of revision:
Handle: RePEc:tor:tecipa:baker-00-02

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  1. Perry C. Beider & B. Douglas Bernheim & Victor R. Fuchs & John B. Shoven, 1986. "Comparable Worth in a General Equilibrium Model of the U.S. Economy," NBER Working Papers 2090, National Bureau of Economic Research, Inc.
  2. 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, University of Chicago Press, vol. 13(3), pages 426-71, July.
  3. Kenneth R Troske & Kimberly N Bayard & Judith Hellerstein & David Neumark, 1998. "New Evidence On Sex Segregation And Sex Differences In Wages From Matched Employee-Employer Data," Working Papers, Center for Economic Studies, U.S. Census Bureau 98-18, Center for Economic Studies, U.S. Census Bureau.
  4. 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, University of Chicago Press, vol. 5(1), pages 43-62, January.
  5. Jeff Borland, 1999. "The Equal Pay Case-Thirty Years On," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 32(3), pages 265-272.
  6. Judith A. McDonald & Robert J. Thornton, 1998. "Private-Sector Experience with Pay Equity in Ontario," Canadian Public Policy, University of Toronto Press, vol. 24(2), pages 185-208, June.
  7. 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, American Economic Association, vol. 89(2), pages 198-203, May.
  8. Killingsworth, Mark R, 1987. "Heterogeneous Preferences, Compensating Wage Differentials, and Comparable Worth," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 102(4), pages 727-42, November.
  9. Ashenfelter, Orley & Smith, Robert S, 1979. "Compliance with the Minimum Wage Law," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 87(2), pages 333-50, April.
  10. Orazem, Peter F & Mattila, J Peter, 1990. "The Implementation Process of Comparable Worth: Winners and Losers," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 98(1), pages 134-52, February.
  11. Bergmann, Barbara R, 1989. "Does the Market for Women's Labor Need Fixing?," Journal of Economic Perspectives, American Economic Association, American Economic Association, vol. 3(1), pages 43-60, Winter.
  12. O'Neill, June & Brien, Michael & Cunningham, James, 1989. "Effects of Comparable Worth Policy: Evidence from Washington State," American Economic Review, American Economic Association, American Economic Association, vol. 79(2), pages 305-09, May.
  13. Johnson, George & Solon, Gary, 1986. "Estimates of the Direct Effects of Comparable Worth Policy," American Economic Review, American Economic Association, American Economic Association, vol. 76(5), pages 1117-25, December.
  14. George A. Akerlof & Rachel E. Kranton, 2000. "Economics And Identity," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 115(3), pages 715-753, August.
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Cited by:
  1. Nicole M. Fortin & Michael Huberman, 2002. "Occupational Gender Segregation and Women's Wages in Canada: An Historical Perspective," CIRANO Working Papers, CIRANO 2002s-22, CIRANO.

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