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Comparable worth in a decentralized labour market: the case of Ontario

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  • Michael Baker
  • Nicole M. Fortin

Abstract

. We document the application of pro‐active pay equity legislation to the private sector of the Canadian province of Ontario in the early 1990s. We report substantial lapses in compliance among smaller firms where the majority of men and women work. We also find that the pay equity law had no effect on aggregate wages in female jobs or on the gender wage gap. This experience provides unique perspectives on (1) the tensions between the workings of a decentralized labour market and the principles of comparable worth and (2) the obstacles to its extension to the private sector. JEL classification: J7, J3 L'équité salariale dans un marché du travail décentralisé: le cas de l’Ontario. Les auteurs documentent l’application de la loi d’équité salariale mise en vigueur dans le secteur privé en Ontario au début des années 1990. On fait état de défaillances substantielles dans la mise en œuvre de cette politique auprès des PME (où la majorité des hommes et des femmes travaillent). L’analyse révèle que, au niveau agrégé, la loi d’équité salariale n’a pas eu d’effets sur les salaires dans les emplois féminins ou sur l’écart salarial entre les hommes et les femmes. L’expérience ontarienne fournit des perspectives éclairantes sur 1) les tensions entre le fonctionnement d’un marché du travail décentralisé et les principes de salaire égal pour un travail de valeur comparable, et 2) sur les obstacles à l’extension de ces principes au secteur privé.

Suggested Citation

  • Michael Baker & Nicole M. Fortin, 2004. "Comparable worth in a decentralized labour market: the case of Ontario," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 37(4), pages 850-878, November.
    • Handle: RePEc:wly:canjec:v:37:y:2004:i:4:p:850-878
    DOI: 10.1111/j.0008-4085.2004.00251.x
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    References listed on IDEAS

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    1. Ingeborg HEIDE, 1999. "Supranational action against sex discrimination: Equal pay and equal treatment in the European Union," International Labour Review, International Labour Organization, vol. 138(4), pages 381-410, December.
    2. Orazem, Peter F & Mattila, J Peter, 1990. "The Implementation Process of Comparable Worth: Winners and Losers," Journal of Political Economy, University of Chicago Press, vol. 98(1), pages 134-152, February.
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    4. Michael Baker & Nicole M. Fortin, 2000. "Does Comparable Worth Work in a Decentralized Labor Market?," NBER Working Papers 7937, National Bureau of Economic Research, Inc.
    5. Judith A. McDonald & Robert J. Thornton, 1998. "Private-Sector Experience with Pay Equity in Ontario," Canadian Public Policy, University of Toronto Press, vol. 24(2), pages 185-208, June.
    6. Michael Baker & Nicole M. Fortin, 2001. "Occupational gender composition and wages in Canada, 1987–1988," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 34(2), pages 345-376, May.
    7. Mark R. Killingsworth, 1987. "Heterogeneous Preferences, Compensating Wage Differentials, and Comparable Worth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 102(4), pages 727-742.
    8. Johnson, George & Solon, Gary, 1986. "Estimates of the Direct Effects of Comparable Worth Policy," American Economic Review, American Economic Association, vol. 76(5), pages 1117-1125, December.
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    Cited by:

    1. Tammy Schirle, 2015. "The Gender Wage Gap in the Canadian Provinces, 1997-2014," Canadian Public Policy, University of Toronto Press, vol. 41(4), pages 309-319, December.
    2. Nicole M. Fortin, 2019. "Increasing earnings inequality and the gender pay gap in Canada: Prospects for convergence," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 52(2), pages 407-440, May.
    3. Karsten Albæk & Mona Larsen & Lars Stage Thomsen, 2017. "Segregation and gender wage gaps in the private and the public sectors: an analysis of Danish linked employer–employee data, 2002–2012," Empirical Economics, Springer, vol. 53(2), pages 779-802, September.
    4. Arup Bose & Debashis Pal & David E. M. Sappington, 2010. "Equal Pay for Unequal Work: Limiting Sabotage in Teams," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 19(1), pages 25-53, March.
    5. Fortin, Nicole M. & Bell, Brian & Böhm, Michael, 2017. "Top earnings inequality and the gender pay gap: Canada, Sweden, and the United Kingdom," Labour Economics, Elsevier, vol. 47(C), pages 107-123.
    6. Luiza Antonie & Miana Plesca & Jennifer Teng, 2016. "Heterogeneity in the Gender Wage Gap in Canada," Working Papers 1603, University of Guelph, Department of Economics and Finance.
    7. Michael Baker & Marie Drolet, 2010. "A New View of the Male/Female Pay Gap," Canadian Public Policy, University of Toronto Press, vol. 36(4), pages 429-464, December.
    8. Singh, Vikkram & Shirazi, Homayoun & Turetken, Jessica, 2022. "COVID-19 and gender disparities: Labour market outcomes," Research in Economics, Elsevier, vol. 76(3), pages 206-217.
    9. Morley Gunderson, 2006. "Viewpoint: Male‐female wage differentials: how can that be?," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 39(1), pages 1-21, February.

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    More about this item

    JEL classification:

    • J7 - Labor and Demographic Economics - - Labor Discrimination
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs

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