Comparable Worth Comes to the Private Sector: The Case of Ontario

Michael Baker and Nicole M. Fortin

No 266, Econometric Society World Congress 2000 Contributed Papers from Econometric Society

Abstract: We investigate the effect of pro-active comparable worth legislation, covering both the public and private sectors, on wages, employment and the gender gap. Our focus is the pay equity initiative adopted by the Canadian province of Ontario in the early 1990s. Our preliminary finding is that the law fell short of its goal of reducing gender based wage differentials.Firm surveys indicate that the effect of the legislation was blunted by lack of compliance in small private firms, the low incidence of undervalued female work in larger firms, and more generally the lack of male comparators for female jobs. These sorts of problems would appear endemic to any attempt to extend comparable worth to the private sector of a decentralized labor market. Our analysis of individual level data, which uses difference--in--difference models, kernel regressions and kernel density estimations, suggests that even in those sectors where the legislation had ``bite'' (among non-unionized workers in larger establishments), any positive effects on the wages of females in female jobs were very modest. Our most consistently estimated effects of the law on wages are negative: slower wage growth for females in male jobs and for males in female jobs.

Date: 2000-08-01
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