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Explaining Canadian Regional Wage Relativities

Author

Listed:
  • Ian G. Cahill

    (Cahill Software)

  • Michael Gager

    (Treasury Board Secretariat, Government of Canada)

Abstract

We explore the source of Canadian regional wage differences attempting to measure the extent to which they are driven by differences in human capital and industrial structures. An econometric model of wage determination including variables intended to capture these effects is estimated. We conduct sensitivity analyses by estimating the model with various sets of variables. A striking finding is that differences in the wages between urban areas within a province or region can be explained by a human capital model augmented with controls for occupation and industry, while the differences between the broad regions defined by provincial boundaries cannot.

Suggested Citation

  • Ian G. Cahill & Michael Gager, 2014. "Explaining Canadian Regional Wage Relativities," The Review of Regional Studies, Southern Regional Science Association, vol. 44(2), pages 125-152, Summer.
  • Handle: RePEc:rre:publsh:v44:y:2014:i:2:p:125-152
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    References listed on IDEAS

    as
    1. Samira Bakhshi & Mohammad Shakeri & M. Rose Olfert & Mark D. Partridge & Simon Weseen, 2009. "Do Local Residents Value Federal Transfers?," Public Finance Review, , vol. 37(3), pages 235-268, May.
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    3. Sébastien Breau & David L. Rigby, 2010. "International trade and wage inequality in Canada," Journal of Economic Geography, Oxford University Press, vol. 10(1), pages 55-86, January.
    4. Bazen, Stephen, 2011. "Econometric Methods for Labour Economics," OUP Catalogue, Oxford University Press, number 9780199576791.
    5. Mario Polèse & Richard Shearmur, 2004. "Is Distance Really Dead? Comparing Industrial Location Patterns over Time in Canada," International Regional Science Review, , vol. 27(4), pages 431-457, October.
    6. Mark Ferguson & Kamar Ali & M. Rose Olfert & Mark Partridge, 2007. "Voting with Their Feet: Jobs versus Amenities," Growth and Change, Wiley Blackwell, vol. 38(1), pages 77-110, March.
    7. Daniel Heuermann & Benedikt Halfdanarson & Jens Suedekum, 2010. "Human Capital Externalities and the Urban Wage Premium: Two Literatures and their Interrelations," Urban Studies, Urban Studies Journal Limited, vol. 47(4), pages 749-767, April.
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    More about this item

    Keywords

    regional; wage differentials;

    JEL classification:

    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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