Wage Discrimination In Canada

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Over the last two decades, numerous studies have shown that Aboriginal people in Canada face a substantial earnings gap in comparison to the non-Aboriginal population. Although some of these studies offer slightly different estimates of the wage differential due to different definitions of the Aboriginal population, they all consistently find that there is a positive relationship between the size of the earnings gap and the “degree of Aboriginal identification” (DeSilva, 1999). For men, there is a gap of 50.0% and for women, 34.2% (Lamb, 2013). A large portion of the differential can be explained by the fact that Aboriginal people have lower quality of characteristics that are associated with higher pay. However, most of these characteristics,…show more content…
Unsurprisingly, the Oaxaca decomposition shows that the largest “unexplained” portion was felt by on-reserve Aboriginals (35.34% for men and 19.17% for women) and North American Indians (10.74% for men and 9.41% for women), a pattern which matches the one seen for the raw wage differential. In other words, Aboriginals are paid less than non-Aboriginals with the same level of schooling and labour market experience. This suggests some degree of discrimination, especially for these two groups who most strongly identify as…show more content…
The Statistics Canada census categorizes North American Indian, Inuit and Métis people under the broad “Aboriginal people” umbrella, which includes both status and non-status Indians (Patrinos and Sakellariou, 1992). Status Indians are registered under the government and are eligible to receive support and services, including education, health and social assistance. However, Aboriginals who live off-reserve do not receive as many benefits as those who live on-reserve, regardless of their status. For economists studying the earnings differential, there may be potential bias depending on which group they choose to study. For example, analyzing data from a sample of on-reserve Aboriginals may lead to a lower wage gap due to the extra education services those individuals receive. There can also be bias among the subgroups of Aboriginals, as those results are self-reported and cannot be controlled for. Because different studies have analyzed different subgroups of Aboriginals, it is challenging to compare the magnitude of the earnings gap across
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