Journal Article

International trade and wage inequality in Canada

Sébastien Breau and David L. Rigby

in Journal of Economic Geography

Volume 10, issue 1, pages 55-86
Published in print January 2010 | ISSN: 1468-2702
Published online April 2009 | e-ISSN: 1468-2710 | DOI: https://dx.doi.org/10.1093/jeg/lbp016
International trade and wage inequality in Canada

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  • International Trade
  • Welfare Economics
  • Wages, Compensation, and Labour Costs
  • Household Analysis

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We investigate the impact of international trade on wages and on wage inequality across industries and regions in Canada. An employer–employee dataset is developed combining individual worker characteristics from the 20% sample of the 2001 Census of Population and synthetic establishments from the 1999 Annual Survey of Manufactures. Results from wage regression models show that import competition from low-income countries has a significant impact on wage inequality in Canada, pushing down the wages of less-educated workers relative to those of highly educated workers. The negative effect of import competition on the wages of less-skilled workers is shown to be more pronounced in Québec and in the Prairie provinces, as well as in labor-intensive and product-differentiated industries.

Keywords: wage inequality; import competition; micro-data; Canada; F16; J31; R23; D63

Journal Article.  13996 words.  Illustrated.

Subjects: International Trade ; Welfare Economics ; Wages, Compensation, and Labour Costs ; Household Analysis

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