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Interindustry Wage Differentials and Efficiency Wages: Some Canadian Evidence

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  • Surendra Gera
  • Gilles Grenier

Abstract

Using the 1986 Labour Market Activity Survey as their major source of data, the authors estimate interindustry wage differentials in Canada at the one- and two-digit levels of industry aggregation for various types of workers. The major findings are that substantial interindustry wage differentials exist and are relatively stable over time; that the pattern of interindustry wage differentials is very similar for different kinds of workers; and that these differentials cannot be explained easily by compensating factors. The differentials seem to be consistent with the rent-sharing explanations of the labor market, such as those based on the notion of efficiency wages.

Suggested Citation

  • Surendra Gera & Gilles Grenier, 1994. "Interindustry Wage Differentials and Efficiency Wages: Some Canadian Evidence," Canadian Journal of Economics, Canadian Economics Association, vol. 27(1), pages 81-100, February.
    • Handle: RePEc:cje:issued:v:27:y:1994:i:1:p:81-100
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    Cited by:

    1. Debasis Bandyopadhyay, 2001. "The industry premium: What we know and what the New Zealand data say," New Zealand Economic Papers, Taylor & Francis Journals, vol. 35(1), pages 53-75.
    2. David A. Green, 2015. "Chasing after good jobs. Do they exist and does it matter if they do?," Canadian Journal of Economics, Canadian Economics Association, vol. 48(4), pages 1215-1265, November.
    3. Vesna Stavrevska, 2011. "The efficiency wages perspective to wage rigidity in the open economy: a survey," International Journal of Manpower, Emerald Group Publishing Limited, vol. 32(3), pages 273-299, June.
    4. Stadler, Manfred, 1998. "Dual labor markets, unemployment and endogenous growth," Tübinger Diskussionsbeiträge 126, University of Tübingen, School of Business and Economics.
    5. Henri L.F. de Groot & Anton B.T.M. van Schaik, 2002. "Unemployment, Growth and the Organisation of Work," Tinbergen Institute Discussion Papers 02-017/3, Tinbergen Institute.
    6. Louis Christofides & Amy Chen Peng, 2007. "Real Wage Chronologies," CESifo Working Paper Series 2096, CESifo.
    7. Surendra Gera & Kurt Mang, 1998. "The Knowledge-Based Economy: Shifts in Industrial Output," Canadian Public Policy, University of Toronto Press, vol. 24(2), pages 149-184, June.
    8. Joop Hartog & Pedro Pereira & José Vieira, 2000. "Inter-industry Wage Dispersion in Portugal," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 27(4), pages 353-364, December.
    9. repec:zbw:bofrdp:2005_005 is not listed on IDEAS
    10. Nannan Lundin & Lihong Yun, 2009. "International Trade and Inter‐Industry Wage Structure in Swedish Manufacturing: Evidence from Matched Employer–Employee Data," Review of International Economics, Wiley Blackwell, vol. 17(1), pages 87-102, February.
    11. Amy Peng & Louis N. Christofides, 2009. "Real Wage Chronology," Working Papers 011, Toronto Metropolitan University, Department of Economics.
    12. Hartog, Joop & Pereira, Pedro T. & Vieira, José António Cabral, 1999. "Inter-industry Wage Dispersion in Portugal: high but falling," IZA Discussion Papers 53, Institute of Labor Economics (IZA).
    13. James Townsend, 2007. "Do tariff reductions affect the wages of workers in protected industries? Evidence from the Canada-U.S. Free Trade Agreement," Canadian Journal of Economics, Canadian Economics Association, vol. 40(1), pages 69-92, February.
    14. Virén, Matti, 2005. "Why do capital intensive companies pay higher wages?," Bank of Finland Research Discussion Papers 5/2005, Bank of Finland.
    15. Yang, Sheng-Ping & DeBeaumont, Ronald, 2010. "Pay as incentive or pay as reward? The case of Taiwan," Journal of Asian Economics, Elsevier, vol. 21(1), pages 76-86, February.
    16. Sakellariou, Chris N., 1995. "Human capital and industry wage structure in Guatemala," Policy Research Working Paper Series 1445, The World Bank.
    17. Virén, Matti, 2005. "Why do capital intensive companies pay higher wages?," Research Discussion Papers 5/2005, Bank of Finland.
    18. Nico Dewaelheyns & Cynthia Van Hulle & Yannick Van Landuyt & Mathias Verreydt, 2021. "Labor Contracts, Wages and SME Failure," Sustainability, MDPI, vol. 13(14), pages 1-15, July.
    19. Goerke, Laszlo, 1997. "Taxes in an efficiency wage economy," Discussion Papers, Series II 335, University of Konstanz, Collaborative Research Centre (SFB) 178 "Internationalization of the Economy".
    20. Matti Viren, 2006. "Higher wages and capital intensity: a closer look," Discussion Papers 13, Aboa Centre for Economics.
    21. Matti Virén, 2005. "Why do capital intensive companies pay higher wages?," Labor and Demography 0508014, University Library of Munich, Germany.
    22. de Groot, H.L.F. & van Schaik, A.B.T.M., 1997. "Unemployment and catching up : Europe vis à vis the USA," Other publications TiSEM da7dcf42-9007-43df-a948-e, Tilburg University, School of Economics and Management.
    23. van Schaik, A.B.T.M. & de Groot, H.L.F., 2000. "Unemployment, growth and efficiency wages," Other publications TiSEM faa209e7-3a95-41b0-958f-0, Tilburg University, School of Economics and Management.
    24. Cherry, Todd L. & Tsournos, Pete T., 2001. "Family Ties, Labor Mobility and Interresgional Wage Differentials," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 31(1), pages 1-11.

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