In this paper, we present wage determination model based on human capital theory. The model is developed for the engineers market in Quebec. The wage level is function of variables such as formai education, vocational training and experience. Also, as a special feature of our model, wages vary as a function of administrative responsibilities of engineers. Given the survey avallable, we can distinguish four levels of responsibilities. Finally, standard macro economic variables such as price level, unemployment rate and labour productivity complete the model.

The model was tested with data coming from an annual survey on engineers' wages in the province of Quebec. Since the data used were collected from 1985 to 1988, a large number of observations (close to 6 000) were avallable. The model was first estimated for what we call the reference market. The latter is defined in two ways. First, it covers the private sector as well as public or crown corporations and the federal government. In the second definition, it only covers the private sector. In both cases, the reference market excluded the Quebec government engineers since one purpose of the study is to test the wage competitiveness of Quebec government engineers.

The first set of results appears in table 1. The estimated coefficients of explanatory variables do have the right sign and are statistically significant. However, among the macro variables, only productivity is significant. This result was to be expected given the short period of time covered (1985 to 1988). It has to be noted that the estimated coefficients of the four variables used to define administrative responsibilities are significant.

Hence, it is possible to simulate the impact of a change in the level of administrative responsibilities on the basic wage rate, and thus derive a salaryscale from the model. For example, in the reference market, a premium of roughly 11 000 $ above the basic wage is paid for top administrative responsibilities.

Another set of results appears in table 2. In this case, engineers were allocated into three sub-categories (junior engineers, senior and management). Four specialization variables were also introduced in the model (electrical engineering, mechanical, civil and «other»). It turns out that only the estimated coefficient for civil engineers and for «other engineers» were significant and are reported in table 2. Again, the results show clearly the effect of administrative responsibilities on the level of wages.

Instead of using dummy variables to determine the impact of specialization on the wage level, we have estimated in table 3 four different equations for civil, electrical and mechanical engineers. The forth one included all other engineers. Although in gênerai the same set of variables influence the wage level for all specialization, the estimated coefficients vary from one specialization to another. Moreover, advanced studies (master or Ph.D.) have a significant impact on wage only in the case of electrical engineers. From the models estimated, it is possible to test the competitiveness of the wage rate of the Quebec government engineers. The test was made as follows: the wage rate of the government engineers were derived from the previous estimated models by substituing the average characteristics of the reference market by the average characteristics of the Quebec government engineers. Results of these simulations appear in table 4. From this table, we find that the wage rate of government engineers is significantly below the market rate. The gap is particulary high for electrical engineers. The test is however limited to a wage comparison and does not deal with other aspects of income (job security, social benefits and so on). Hence, the income disadvantage of the Quebec government engineers may not be as high as the wage comparison suggests. But overall, we conclude that the Quebec government engineers are currently underpaid and the government should increase their wage rate in order to be able to recruit qualified engineers.