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Output Pay and Ethnic Wage Differentials: Canadian Evidence



Using the Workplace and Employee Survey, we are the first to examine the association between payment method and ethnic wage differentials in Canada. Following earlier theory, we hypothesize that output pay tying earnings to productivity makes it more difficult for employers to discriminate. The empirical estimations show that non-Europeans in Canada paid by time rates receive lower earnings than Europeans paid by time rates. Yet, non-Europeans paid by output pay receive virtually identical earnings to their European counterparts.