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Applying the Wage-Common to Canadian Provinces

Author

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  • Jonathan Lachaine

Abstract

As at the national level, available sources of hourly wage data for Canadian provinces sometimes send conflicting signals about wage growth. This note has two objectives. First, we develop a common measure of provincial wages (the provincial wage-common) to better capture the underlying wage pressures, reflecting the overall trend across all data sources. Second, we focus on recent wage developments in Quebec, Ontario, Alberta and British Columbia and the relationship between wage growth in these provinces and some macroeconomic drivers. We conclude that a provincial wage-common provides, for the most part, superior estimates than each of the data sources taken individually because of their timeliness, lower volatility and good relationships with fundamentals. A key finding of our analysis is that the wage-common measures of provinces with a strong energy sector, such as Alberta, are more closely correlated with the national measure and are also more sensitive to oil price shocks than the wage-common measures of the other provinces.

Suggested Citation

  • Jonathan Lachaine, 2018. "Applying the Wage-Common to Canadian Provinces," Staff Analytical Notes 2018-16, Bank of Canada.
    • Handle: RePEc:bca:bocsan:18-16
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    References listed on IDEAS

    as
    1. David Amirault & Daniel de Munnik & Sarah Miller, 2016. "What drags and drives mobility? Explaining Canada's aggregate migration patterns," Canadian Journal of Economics, Canadian Economics Association, vol. 49(3), pages 1035-1056, August.
    2. Dany Brouillette & Jonathan Lachaine & Benoit Vincent, 2018. "Wages: Measurement and Key Drivers," Staff Analytical Notes 2018-2, Bank of Canada.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Olena Kostyshyna & Corinne Luu, 2019. "The State of Labour Market Churn in Canada," Staff Analytical Notes 2019-4, Bank of Canada.
    2. Olena Kostyshyna & Corinne Luu, 2019. "The Size and Characteristics of Informal (“Gig”) Work in Canada," Staff Analytical Notes 2019-6, Bank of Canada.

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    More about this item

    Keywords

    Econometric and statistical methods; Labour markets; Recent economic and financial developments;
    All these keywords.

    JEL classification:

    • C - Mathematical and Quantitative Methods
    • C3 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables
    • C38 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Classification Methdos; Cluster Analysis; Principal Components; Factor Analysis
    • J - Labor and Demographic Economics
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs

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