This thesis seeks to add to the understanding of wage determination in Canada. Data from the Labour Market Activity Survey and the Survey of Displaced Workers are analysed to indicate the degree to which wages for workers of given observable characteristics vary across industries. Possible explanations for such differentials are considered, with market-clearing models argued to be unconvincing compared to the main alternative, efficiency-wage theory, which allows for a persistent distribution of labour rents across industries. In particular, the key mechanisms in versions of the efficiency-wage hypothesis appealing to workers' concern for fairness are found to be relatively free of persuasive objections, and to be supported by a substantial body of theoretical and empirical work in social psychology and sociology, as well as in economics. The extent to which the observed inter-industry wage differentials can be explained in terms of posited mechanisms for the operation of workers' concern for fairness is then examined. Some indications of the influence of the concern for equity on inter-industry wage differentials are found, although limitations in the data and multicollinearity among regressors restrict the ability to isolate different industry-specific effects. It is concluded that while there is both a theoretical and an empirical basis for the proposition that workers' concern for fairness plays a role in the determination of wages in Canada, more work on this question, ideally combined with the availability of comprehensive firm-level data, is needed to get a more precise idea of the extent of this influence.

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Regional economic disparities are a widely noted characteristic of the Canadian economy. This thesis examines regional disparities in terms of wages and labour productivity in the manufacturing sector. Regional disparities are analysed along three dimensions: provinces, rural/urban areas and industrial structure. Various competing theories are discussed and compared to the findings. Shift-share based decomposition analyses the magnitude and pattern of disparity and controls for industrial structure. Weighted regression is used to combine provincial and rural/urban effects. The findings support theories that emphasize provinces as units of analysis. The rural/urban results gave qualified support to urban theory. Accounting for industrial structure impacted both the rural/urban and provincial results. The regression analysis found the rural/urban dimension was significant; however, industrial structure and provincial effects were more significant. These results suggest industrial location and provincial economic policies can influence regional economic disparities in Canada.

No description available.