Returns to Skills in Canadian Provinces and U.S.States

Abstract

This paper examines the expected mean wages and the parameters of returns to skills in 10 Canadian provinces and 48 American states. I replicate the Hunt and Mueller (2002) paper using updated data sets: the 2006 American Community Survey and the 2006 Canadian Census of Population. Like Hunt and Mueller, I find that the average values of the standardized mean weekly wages and of the standardized index of returns to skills in the U.S. are higher than those in Canada for males and females. The Canadian provinces with the top three rankings in the mean weekly wages remain the same, and the gender gap in mean weekly wage persists. By contrast, the average values of the mean weekly wages in the U.S. are higher than in Canada for males, while the values are similar for females in the two countries. If one focuses on the average value of returns to skills index, it is higher for females than it is for males.