The Impact of Annual Wages on Interprovincial Mobility, Interprovincial Employment, and Job Vacancies /

This study estimates the causal impact of real after-tax annual wages and salaries on the propensity of young men to migrate to Alberta or to accept jobs in that province while maintaining residence in their home province. To do so, it exploits the cross-provincial variation in earnings growth plausibly induced by increases in world oil prices that occurred during the 2000s. Using data that cover the 2001-to-2008 period, the study shows that a 5% increase in real average annual wages in Alberta relative to those in other provinces increased the probability of young unmarried men moving to Alberta by roughly 0.35 percentage points, from a baseline rate of 0.64%. The estimated increase in the migration of young men induced by changes in the regional earnings structure represents 12% to 24% of the job vacancies observed in Alberta during this period. There is also evidence—although sensitive to functional form—that changes in the regional earnings structure increased transitions into interprovincial employment.