New Evidence on Gender Pay Differentials: Does Measurement Matter?

Data from the 1997 Survey of Labour and Income Dynamics are used to investigate the extent to which factors not previously explored in the Canadian context account for wage differences between men and women. Women's average hourly wage rate is about 82 percent - 89.5 percent of the men's average after controlling for a variety of productivity-related characteristics. Using standard decomposition techniques, gender differences in actual work experience explain 12 percent, differences in major field of study justify 5 percent and differences in job responsibility account for about 6 percent of the gender wage gap. Proxy measures for experience overstate women's labour-market experience and explain virtually none of the gender earnings differential. Despite the long list of productivity-related factors used in this study, a substantial portion of the gender wage gap cannot be explained.