Minimum wage effects in the Canadian labour market (1981-2000)

Abstract

This thesis examines the effect of minimum wage changes on employment, labour force participation and schooling using Canadian provincial data for the period 1981 to 2000. This study uses two measures of schooling namely enrollment rates and continuation ratios. The analysis also includes the effect of the minimum wage on the employment and labour force participation of both teenage and adult age groups. The minimum wage variable in the regression analysis is the real adult minimum wage rate. Coverage of the minimum wage is not incorporated in the formula since minimum wage coverage is almost complete for the period being analyzed. Results show that the minimum wage has a significant negative effect on both employment and labour force participation rates for most age-sex groups studied. The effect of the minimum wage on enrollment rates and continuation ratios were insignificant for most grade and transition-sex groups with positive results observed in most cases where significant results were obtained.