Language and Wage Determination in a Segmented Urban Labor Market : Evidence from Canada

I build a simple model of labor market segmentation in this paper. People of different language origins form separate urban labor submarkets. Utilizing the reported work language in the 2001 Census of Canada Public Use Microdata File on Individuals, I identify workers' labor market segments and test the two key implications of the model. First, I find that English speaking workers earn more than workers whose first language is not English even though they all speak English at work. In addition, minority workers earn higher wages in English-speaking jobs than non English-speaking jobs. Second, wages in the majority labor market increase with the majority population. On the other hand, wages in the minority labor market decrease with the majority population, but they increase with the minority population