Understanding Regional Differences in Work Hours: Executive summary

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Executive summary

In recent years, international differences in work hours have been the focus of a substantial body of research. Much less attention has been paid to regional differences in working time in Canada, in spite of regional differences in average work hours that are of a magnitude that is similar to that of the Canada–U.S. difference in work hours. In this paper, we document regional differences in work hours across 6 regions of Canada for 2004, using a representative sample of 19,500 workers from the Survey of Labour and Income Dynamics. We also examine potential explanations for these differences.

Average hours per worker were lower than the Canadian average in Quebec, the Atlantic and in British Columbia. In the Atlantic and in British Columbia, low working hours were mostly the result of a larger share of individuals working short years. In Quebec, the relative prevalence of the 'low' full-year, full-time schedule (the equivalent of 29 to 37 weekly hours of work over 52 weeks) was the main difference between this province and the rest of the country (including Ontario). This suggests that Quebec–Ontario differences in average work hours, for the most part, were the result of differences in the middle of the hours distribution.

Average hours were higher than the Canadian average in Ontario, Manitoba–Saskatchewan and in Alberta. While differences in average work hours were relatively small across these regions, men in Manitoba–Saskatchewan and Alberta were relatively more likely to work more than 2,300 hours per year (long year), and women were relatively more likely to work fewer than 1,500 hours (short year). Ontario had more individuals working between 1,500 and 2,300 hours per year (full-year, full-time schedule).

What explains regional differences in working hours? International studies of working time often point to a large pool of 'observable' factors (factors that can be easily quantified in household surveys) and 'unobservable' factors (factors that are difficult to observe in household surveys) to explain international differences in work hours, which may also apply to regional differences in work hours. Unobservable factors include differences in incentives related to wage inequality as well as differences in taxes, in macroeconomic conditions, in local preferences and tastes, and in the shape of institutions. Observable factors include compositional differences in union status, industrial structure, job conditions and demographic characteristics.

Using decomposition techniques, we determine how much of the differences in work hours between Ontario and five other regions of Canada can be explained by differences in union status, industrial structure, job conditions and demographic characteristics. While observable factors were relatively inefficient in explaining differences in average work hours, they were more efficient in explaining regional differences in the share of individuals working a short year (fewer than 1,500 hours). For example, 'observables' explain almost entirely why workers in Quebec and in Manitoba–Saskatchewan were more likely to work a short year than their Ontario counterparts. In addition, one third to two thirds of the differences in the share of individuals working between 1,900 and 2,300 hours a year could be attributed to observables. Of the observables, differences in union status and demographic characteristics explained very little of the differences in work hours. Differences in industrial structure and in job conditions (including firm size and management responsibilities) explained more of the differences. However, observables did not explain differences in long work hours, did not entirely explain the larger share of workers with short years in the Atlantic and in British Columbia, and did not explain the large incidence of the low full-year, full-time schedule in Quebec (between 1,500 to 1,900 hours per year). These remaining differences suggest that unobservable factors also contribute to exacerbate differences in regional work hours.

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