Abstract
The objective of this paper is to analyse the Canadian wage determination process using micro-data derived from individual union wage contracts, signed during the 1966-1975 time period. Conventional wage studies based on aggregate time series are subject to a number of important econometric criticisms arising from their failure to specify correctly the institutional features of the labour market (such as multi-year contracts, deferred increments and the variability of the bargaining calendar). Use of micro-data prior to aggregation not only avoids most of these institutional econometric problems, but also makes possible a precise investigation of several important theoretical and policy issues. In particular, it is possible to separate expected inflation from uncompensated past inflation and to investigate the impact of each type of inflation on the wage determination process. We also pay attention to the changing structure of the Canadian labour market and to the possible impact of the 1971 Unemployment Insurance Act (UIA) revision on Canadian wage inflation.
Published Version
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