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The Labour Market and Economic Performance of Canada’s First Nations Reserves: The Effect of Educational Attainment and Remoteness

Author

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  • Andrew Sharpe

    ()

  • Simon Lapointe

    ()

Abstract

The goal of this report is to investigate the relationship between educational attainment, remoteness, and labour market and economic performance at the reserve level for Aboriginal Canadians. The report uses reserve-level data on average earnings, GDP per capita, labour market indicators and distance to a service centre for 312 reserves. Using descriptive statistics, simple correlation and multiple regression analysis, the report draws conclusion on four important questions. First, the report finds that a higher level of educational attainment, on average, has a positive effect on the labour market performance of a reserve. Then, a positive link is found between educational attainment and economic performance (average earnings and GDP per capita). Also, the report finds evidence that remoteness of a reserve plays a role in its labour market and economic performance. Specifically, reserves situated near urban centres fare better than the ones in rural/remote areas and those not connected by road to a service centre all year long (special access). However, when controlling for characteristics of reserves, the very remote reserves seem to fare better than expected in comparison to urban reserves. Yet, when an instrumental variable is used to account for the possibility that educational attainment is endogenous in the model, the remoteness of a reserve appears to play no role in determining reserve labour market or economic performance. Finally, the report also analyses the role of governance on labour market and economic performance. It finds that better governance is correlated to better labour market performance, higher average earnings and higher GDP per capita.

Suggested Citation

  • Andrew Sharpe & Simon Lapointe, 2011. "The Labour Market and Economic Performance of Canada’s First Nations Reserves: The Effect of Educational Attainment and Remoteness," CSLS Research Reports 2011-05, Centre for the Study of Living Standards.
  • Handle: RePEc:sls:resrep:1105
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    File URL: http://www.csls.ca/reports/csls2011-05.pdf
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    References listed on IDEAS

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    1. Dani Rodrik & Arvind Subramanian & Francesco Trebbi, 2004. "Institutions Rule: The Primacy of Institutions Over Geography and Integration in Economic Development," Journal of Economic Growth, Springer, vol. 9(2), pages 131-165, June.
    2. Andrew Sharpe & Jean-Francois Arsenault & Simon Lapointe, 2007. "The Potential Contribution of Aboriginal Canadians to Labour Force, Employment, Productivity and Output Growth in Canada, 2001-2017," CSLS Research Reports 2007-04, Centre for the Study of Living Standards.
    3. Martine Rutten, 2009. "The Economic Impact of Medical Migration: An Overview of the Literature," The World Economy, Wiley Blackwell, vol. 32(2), pages 291-325, February.
    4. James H. Stock & Motohiro Yogo, 2002. "Testing for Weak Instruments in Linear IV Regression," NBER Technical Working Papers 0284, National Bureau of Economic Research, Inc.
    5. Daron Acemoglu & Simon Johnson & James A. Robinson, 2001. "The Colonial Origins of Comparative Development: An Empirical Investigation," American Economic Review, American Economic Association, vol. 91(5), pages 1369-1401, December.
    6. Michael P. Murray, 2006. "Avoiding Invalid Instruments and Coping with Weak Instruments," Journal of Economic Perspectives, American Economic Association, vol. 20(4), pages 111-132, Fall.
    7. Andrew Sharpe & Jean-François Arsenault, 2010. "Investing in Aboriginal Education in Canada: An Economic Perspective," CSLS Research Reports 2010-03, Centre for the Study of Living Standards.
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    Cited by:

    1. Evan Capeluck & Andrew Sharpe, 2013. "Labour Market Prospects for the Métis in the Canadian Mining Industry," CSLS Research Reports 2013-02, Centre for the Study of Living Standards.
    2. Centre for the Study of Living Standards, 2013. "The Contribution of Broadband to the Economic Development of First Nations in Canada," CSLS Research Reports 2013-04, Centre for the Study of Living Standards.

    More about this item

    Keywords

    Aboriginal Canadians; reserves; educational attainment; remoteness; governance; labour market; economic performance;

    JEL classification:

    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General

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