Gender and racial differentials in compensation, promotions and separations in Canada.

Description

During the last several decades, the composition of the Canadian labour force has become more diverse in terms of both race and gender. According to the Canadian Censuses, women made up 46% of the Canadian labour force in 2001, up from 42% in 1981, while visible minorities at 13.4%, have tripled their representation since 1981. Using a firm-level dataset, this thesis explores the gender and racial differentials in three employment outcomes: compensation, promotions and separations between 1996 and 2000. Various earnings models and decomposition analyses are employed to investigate whether earnings gaps existed between white females, minority males, minority females and white males and to understand the factors that contribute to the gaps. Discrete choice models are used to understand the determinants of promotions and separations and whether there is any gender or racial differentials in these two employment outcomes. Empirical results show that a significant portion of the earnings gap can be attributed to the fact that women and members of minority groups are more likely to be situated at the lower rungs of the organizational hierarchy. The findings from the incidence of promotion show support for the "sticky floor" hypothesis, where relative to white males, equally qualified white women and minority women at lower levels of the organizational hierarchy face the most unequal opportunity in terms of career advancement. Further, if women and racial minorities were treated as if they were white males, they would enjoy a much higher probability of being promoted throughout the organizational hierarchy than their white male counterparts. Finally, women and racial minority groups are less likely than white males to experience job-to-job separations, which may have a compounding negative effect on their career development and their chances of achieving higher earnings in the future. Public policy and firm's strategies that focus on removing barriers for women and racial minorities in the "pipeline" would not only enhance the competitiveness of Canadian companies, but would enable all labour market participants to fully develop and utilize their potential.

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