Essay on Male-Female Wage Differentials in Canada

3414 Words Oct 24th, 2011 14 Pages
1. Abstract
This study looks at differences in male and female wages using data from Statistics Canada’s annual Survey of Consumer Finance (SCF) and Survey of Labour Income Dynamics (SLID). In addition to information on annual income, this study also looks at hourly wage data, which is a more precise measure as the earnings data series takes into account the price of labour as well as quantity (i.e. individuals’ work/leisure preferences). This study looks at the variables of race, highest achieved level of education as well as age to examine the existence of a wage gap. Like other studies, we have found that males have a higher wage in each of these areas, with females earning an average of 80 – 87% of the males’ average. Furthermore, we
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individuals’ work/leisure preferences), whereas the data series based solely on wage information can more accurately articulate the actual price of labour alone without being skewed by possible preference trends. Based on the earnings data collected by way of the Survey of Consumer Finances (SCF) and the Survey of Labour and Income Dynamics (SLID), the female-male ratio based on full-year full-time (FYFT) workers’ annual earnings has steadied to around 70% since 1992 as seen in Figure 1. This prolonged period of relative stability can be somewhat perplexing given the policy changes enacted by Canadian governments to improve pay equity, “For example, pay equity laws now cover federal workers, public sector workers in many provinces, and private sector workers in Ontario and Quebec.” (Baker, Fortin 2004). This is especially intriguing when it is clear that wage-based ratios tell a much different story. Figure 1 clearly displays a significant amount of discrepancy between earnings- and wage-based ratios. The wage-based ratio is consistently over 10 percentage points higher and shows a gentle upward trend indicating gradual progress in pay equity over the years compared to the earnings-based ratio which seems to stall at around 70%. The higher degree of variation found in the earnings-based ratio during the mid 90s can be attributed to increases in male unemployment levels which lower the difference between earnings- and wage-based

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