The Incubated Revolution: Education, Cohort Effects, and the Linguistic Wage Gap in Quebec, 1970 to 2000

Abstract

The wage gap between higher-earning English-speaking workers and those of the French-speaking majority, that had long characterized Quebec’s labour market, vanished between 1970 and 2000. We unveil a new empirical fact: the closing of the wage gap occurred through the replacement of older generations of workers by younger ones whose earnings were more equal. To explain this, we rely on a two-sector economy model characterized by linguistic barriers and capital mobility. The model not only explains the new fact but is also consistent with the timing of policy changes in the domain of education.

Keywords: Wage Gap, Canadian Economic History, Discrimination, Education, Convergence

JEL Classification: N32, J71, I24