Wage Inequality In Canada

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The Determinants of Wage Discrimination between the same Year Experienced Workers Wage inequality is one of the most important research topics in economics and while there are various theories about how wages are determined, one of the dominant theories is the competitive market theory, which suggests that wages are determined by competitive market. This means that the demand of labor and the supply of labor within each industry determine equilibrium wage and equilibrium employment level. The main conclusion of this theory is that given that a worker qualifies for job, wages will be the same for all the employees (Borjas, 2015). However, data shows that there can be significant wage inequality for people working within the same industry, …show more content…
While this seems valid, various studies show that even when we control the variables like education and past experience, wage differences still persist. This raises a set of questions which need to be answered: why are people with similar background offered different wages? Is this caused by employer’s inherent bias or by inter-employee variability? Is this inequality fair and what could be done to eliminate it? These are some of the questions that will be addressed in this research paper. The goal of this study is to explore SLID2011 data that summarizes some of the demographic and socio-economic data of Canadian citizens and identify whether wage pay gap exists in Canada and which factors shape it. Data will be analyzed for people with same year experience, which was measured using an assumption that people of same age have same number of work experience. Regression results …show more content…
Immigrant population is relevant for Canada, considering that in 2011, a total of 248,700 immigrants entered the country, (with numbers growing annually) and proportion of the foreign-born population in Canada in 2011 was 20.6% (Statistics Canada). Thus, understanding wage determination process for this big part of the society is important. Some of the other independent variables that are commonly utilized in studying wage patterns and discrimination include variables like age, education, class, region and other socio-economic determinants which could explain existing wage gaps. Variables that were relevant and available in SLID2011 were completely utilized for the purposes of this
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