Implications of Technology and Imports for Employment and Wages in Canada

This paper analyzes the net effects of technology and import competition on employment, wages and wage inequality in the Canadian manufacturing sector over the 1970-1990 period by estimating reduced form employment and wage equations. The analysis uses non-production and production workers to distinguish between two types of workers. For each group, person-hours worked, the level of employment and the hourly labor compensation by industry are examined. The major findings for the study are as follows: (1) the growth of employment and real hourly labor compensation in the Canadian manufacturing sector is positively related to technical progress and to the price of imports; (2) the relative employment of non-production to production workers is negatively related to technical progress, while the relative real hourly labor compensation of non-production to production workers is positively associated with technical progress; (3) the relative employment of non-production to production workers is negatively related to the price of imports, and the relative real hourly labor compensation is positively associated with the price of imports.