This article analyzes the female rural-urban wage gap in Canada using longitudinal data from the Survey of Labour and Income Dynamics 1993–96. We estimate a two-step wage equation accounting for unobserved heterogeneity and sample selection. The results indicate that a statistically and economically significant rural-urban wage gap remains after controlling for observed and unobserved characteristics. Further, the results suggest this rural-urban wage difference is not simply induced by immobility between rural and urban markets. Rather, consistent with the effect of thinner rural labor markets, the evidence indicates that rural-urban differences in the impact of a number of explanatory variables are significant.
Keywords: Canada; female wage gap; rural labor markets; sample selection; unobserved heterogeneity; J160; J310; R230
Journal Article. 7330 words. Illustrated.
Subjects: Demographic Economics ; Wages, Compensation, and Labour Costs ; Household Analysis
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