What caused earnings inequality to increase in Canada during the 1980s?

While broad consensus exists that earnings inequality increasedin Canada during the 1980s, as in other industrialised countries,there is little agreement about the causes. The main contributionof this paper is the simultaneous, empirical examination ofeight hypotheses of increased earnings inequality, using multivariateregression analysis, namely: the decline in unionisation, minimumwages and industrialisation, as well as the increase in unemployment,trade, relative supply of university-educated workers and relativesupply of female workers, and technological change. In Canada,during the 1980s, employment and unionisation factors stronglyand consistently explain the increase in annual earnings andhourly wage-rate inequality, after controlling for six otherpossible determinants. The results also point to the importanceof considering a multidimensional explanation of increased earningsinequality and avoiding generalisations across gender, incomeand work status groups.