Testing discrimination in the Canadian Labour Market: French ethnicity, theory and public policy

Economic research has explored causes of the Anglophone earnings and wage advantage over the Francophone minority in Canada. This thesis uses rigorous empirical analysis to assess the contribution of wage discrimination to Anglophone-Francophone wage disparities between 1971 and 1986. Four dimensions of discrimination are considered: (i) overall impacts, (ii) contributions of specific wage-determining factors, (iii) differences between the public and private sectors, and (iv) changes across time. Analysis is based on comparisons of human capital wage equations which are estimated for Anglophones and Francophones. The magnitude of discrimination is estimated using the standard wage decomposition technique, and additional methods are used to determine the statistical significance of discrimination measures. Statistical results indicate that discrimination is an important source of wage differentials between Anglophones and Francophones in Canada. In the private sector 60 percent of the Anglophone wage advantage in 1971 is attributed to discrimination, but the influence of discrimination declines to 30 percent of the Anglophone wage advantage by 1986. The 1986 measure is statistically insignificant. In the public sector, results indicate that Francophones always benefit from reverse discrimination, and also that reverse discrimination becomes increasingly influential between 1971 and 1986. The overall changes in discrimination across time are attributed to the introduction of French language policies which were initiated, or which existed in the 1970's and early 1980's. These policies generate considerable improvements in the economic position of Canada's Francophone minority. Attempts to match empirical outcomes with the predictions of three economic theories of discrimination met with mixed results. Thus, the source of discrimination between Anglophones and Francophones remains unclear, as does the mechanism by which French language policies improved the economic circumstances of Francophones.