5. Why Regional Differences? Some Comments and Conclusions
One of the characteristic features of the Canadian landscape is regional diversity - in physical terms, of course, but more importantly in terms of economic well-being. Some regions in Canada are wealthier than others; and while there is some evidence to suggest that the relative differences in economic well-being appear to be disappearing over time, absolute differences continue to persist (Day and Coulombe, 1999). A literature exists that attempts to explain these differences in terms of labour (im)mobility (e.g., Dickie and Gerking 1998), looking at inter-regional migration in response to unemployment benefits and federal government transfers (e.g.,Winer and Gauthier, 1982), and various other fiscal variables.5 In spite of many policies designed to reduce regional inequalities, they persist - migration is simply insufficient to equilibrate economic variables, like wages, across regions. Several factors can explain persistent differences in remuneration: mobility costs, production costs, government transfers, and, of course, tastes. Dickie and Gerking (1998) suggest that mobility costs play an important role in maintaining persistent wage differences across regions, especially as an individual ages: for an older person who perhaps has seniority or a locked-in pension plan, it is simply too expensive to move even for a higher-paying job.
Given that regional differences exist in several economic measures, and most notably in earnings, it is not very surprising that regional labour markets also respond differently to volunteers. Thus, even though volunteers in, say, British Columbia are paid a premium that exceeds the premium paid to volunteers in, say, the Prairies, we would not expect that this premium would be sufficient to induce workers to move west - for the same reasons that workers do not necessarily move to earn higher salaries, i.e., mobility costs and personal preferences.
Moreover, to the extent that the labour-market premium arises because of the contacts made while volunteering, this mechanism is not transferable and thus the presence of higher differentials elsewhere would not induce volunteers to move to the region with the highest premium. Someone moving to another region would have to foster a new network to enhance his or her employment opportunities in the new region.
Regional differences, therefore, will not be removed through inter-regional migration - thus differences in labour-market responses to volunteering may well persist over time. But why do these markets treat volunteers differently across the regions? Part of the answer may lie in the fact that the characteristics of individuals who volunteer differ quite remarkably across the regions. Part of the answer may lie in the characteristics of the labour market itself. In tight markets where employers find it difficult to recruit high-quality workers, volunteering may provide contacts through which better "matching" may occur; in markets with a glut of highly-skilled workers, the role of the network may be less valuable in matching workers to jobs. It is not surprising, for instance, that the earnings differential between volunteers and non-volunteers is very small in Atlantic Canada: the lack of jobs and employment opportunities may serve to reduce the importance of networking through volunteering.
This paper is the first of its kind to examine the regional labour-market responses to volunteering in Canada. In some ways, its basic result is not surprising: the response to volunteering varies across regions. The largest earnings differential between volunteers and non-volunteers occurs in British Columbia (12.52 per cent) whereas the lowest is in Atlantic Canada (1.17 per cent). In spite of these regional differences, all individuals, irrespective of region of residence, are motivated to volunteer in anticipation of this earnings differential.
- 5A useful review of migration papers is contained in Day and Winer (1994).
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