Aboriginal/Non-Aboriginal Wage Gaps in Canada: Evidence from the 2011 National Household Survey

Abstract

The fact that Aboriginal peoples in Canada have experienced sizable and persistent earnings disadvantages is well documented. However, the most recent estimates of Aboriginal-non-Aboriginal wage differentials utilize data from the 2006 Census. The present analysis seeks to address this gap by providing more recent estimates of Aboriginal earnings disparities for various groups of full-time, full-year workers using data from the 2011 National Household Survey (NHS). We estimate and decompose Aboriginal/non-Aboriginal wage gaps at the mean for a number of different Aboriginal and non-Aboriginal groups living on- and off- reserve. We find that, consistent with previous literature, Aboriginal peoples continue to experience sizable earnings disparities relative to their non-Aboriginal counterparts. We find that Aboriginal Identity respondents living on-reserve experience the largest earnings disparity, followed by males who identify as First Nations and live off-reserve. Respondents who report Aboriginal ancestry, but who do not identify as Aboriginal persons, experience the smallest earnings disadvantage. Results of the decomposition analysis reveal that, unsurprisingly, educational attainment is the most salient factor contributing to the explained portion of the earnings disparity between Aboriginal and non-Aboriginal Canadians. Somewhat disconcerting, we find that where wage disparities are the largest, the explained proportion of the gap tends to be the smallest. Although previous studies can only serve as a rough comparator, relative to earlier estimates of Aboriginal/non-Aboriginal wage differentials using previous census periods, we find that earnings disparities among Aboriginal ancestry groups have remained relatively constant; wage gaps for Aboriginal identity groups have narrowed slightly; while the earnings disadvantage has widened for Aboriginal identity persons living on-reserve. Research and policy programs aimed at improving educational attainment and access to employment among Indigenous peoples are likely worthwhile initiatives. However, more research is needed on the potential role of discrimination in contributing to the persistent earnings disparities between Indigenous and non-Indigenous persons in Canada.

Nonstandard Employment and Indigenous Earnings Inequality in Canada

“…This study is the first, to our knowledge, to explore the nexus between type of employment and earnings disadvantage among Indigenous workers. Consistent with previous literature, we find that Indigenous workers experience a statistically significant earnings disadvantage relative to their Canadian-born, non-Indigenous counterparts (DeSilva, 1999;Feir, 2013;George and Kuhn, 1994;Hossain and Lamb, 2012;Hum and Simpson, 1999;Lamb, 2013;Lamb et al, 2018;Mueller, 2004;Pendakur and Pendakur, 1998, 2011a, 2011b. Controlling for observable characteristics, Indigenous workers are also more likely to hold a nonstandard job, with the exception of voluntary parttime work.…”

“…It is important to note serval limitations of the present analysis, some of which arise from data constraints in the Labour Force Survey. First, while the estimates of Indigenous earnings gaps obtained here using the Labour Force Survey are comparable to more recent estimates obtained from studies using the Canadian Census (Lamb, 2013; Lamb et al., 2018), the Labour Force Survey does not include persons living in the Territories or on Indigenous reserves. Therefore, the results obtained here are not representative of the entire Indigenous population in Canada.…”

“…Differences in human capital characteristics (i.e. education, age, and occupation) are most consistently found to contribute to the 'explained' portion of the Indigenous-non-Indigenous earnings gap, while the 'unexplained' disparity is often attributed to discrimination in labor markets and systemic inequalities arising from a long history of colonialism 4 (DeSilva, 1999;Feir, 2013;George and Kuhn, 1994;Hossain and Lamb, 2012;Hum and Simpson, 1999;Lamb, 2013;Lamb et al, 2018;Mueller, 2004;Pendakur and Pendakur, 1998, 2011a, 2011b. Accordingly, we may hypothesize that:…”

“…So, when these two groups are lumped together, the average earnings for the group become lower than the average earnings for the nativeborn workers of non-Indigenous origin. This implies that a simple Indigenousnon-Indigenous earnings comparison (Lamb, 2013;Lamb et al, 2018) would understate the true gap because the inclusion of immigrants lowers the earnings of the comparison group. So, if we were to control for immigrant status in an earnings comparison, then the Indigenous-non-Indigenous earnings gap would be still larger than if were to ignore immigrant status in the comparison.…”

The Centrality of Education for Indigenous Income Mobility in Canada

“…The Centrality of Education for Indigenous Income Mobility in Canada Canada's history of colonization and State regulation gave rise to social structures that created different socioeconomic opportunities for Indigenous Peoples and non-Indigenous peoples. Over time, social class gaps between non-Indigenous and Indigenous people have persisted; however, the average income disparity decreased slightly between1996 to 2006 (Lamb et al, 2018). Most of the gains within Indigenous populations came from improvements in the position of those who were already higher income earners, while those who were in lower income groups fared worse (Lamb, 2013).…”