Changes in wage inequality in Canada: An interprovincial perspective

Abstract

This paper uses the Canadian Labour Force Survey to understand why the level and dispersion of wages have evolved differently across provinces from 1997 to 2013. The faster increase in the level of wages and the decline in wage dispersion in Newfoundland, Saskatchewan and Alberta are the starkest interprovincial differences. We find that they are accounted for by the growth in the extractive resources sectors, which benefited less‐educated and younger workers the most. Increases in minimum wages since 2005 are found to be the main reason why wages at the very bottom grew more than those in the middle of the distribution.