Globalisation and Wage Inequality: A Comparison of the Manufacturing Sector in Canada and the United States from 1970 to 2001

Abstract

This article compares Canada and the United States in terms of the evolution of the relative wages of production and non-production workers in the manufacturing sector. The results show that the wage ratio is affected by similar economic globalisation variables in each country. Other than technological changes, however, the overall effect of globalisation is more pronounced in Canada. Among economic globalisation variables, such as technological changes and imports from developing countries, the latter has had a less harmful effect on low-skilled workers in the United States than those in Canada. Among the other variables, the wage gap is more affected by union density in Canada. The impact of immigration is low in both countries.