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Canadian Public Policy / Analyse de Politiques, 2003
Cet article utilise les données de la collection LAD pour examiner comment la variabilité des salaires des travailleurs et l'instabilité salariale se sont modifiées au cours des périodes 1982-89 et 1990-97 au Canada. En adoptant la méthodologie de Gottschalk et , nous décomposons l'ensemble des variations des salaires des travailleurs en une variation permanente et une composante transitoire (ou instabilité des salaires). Nous constatons que : (1) il y a eu un accroissement de la variabilité des salaires dans leur ensemble, chez les travailleurs canadiens, entre les dates susmentionnées et que l'accroissement est beaucoup plus marqué chez les hommes, en particulier ceux dont l'emploi est intermittent; (2) cet accroissement de la variabilité des salaires est dû en grande partie à l'élargissement des différences entre les salaires «permanents» pour l'ensemble des travailleurs et non aux changements transitoires concernant les salaires individuels; (3) la variabilité des salaires des hommes tend à suivre une courbe en forme de U suivant les âges, tandis que pour les femmes on a un schéma beaucoup plus plat et, pour les deux sexes, l'instabilité des salaires est forte chez les jeunes et décroît avec l'âge. This paper uses LAD panel data to investigate how variability of workers' earnings and earnings instability for Canada changed between 1982-89 and 1990-97. Following the methodology of Gottschalk and Moffitt (1994), we decompose the total variation of workers' earnings into permanent variation and a transitory component (or earnings instability). It is found that: (i) there has been an increase in overall earnings variability among Canadian workers between the two sub-periods, with the increase much more marked among men, particularly with non-continuous labour market attachment; (ii) the greatest part of this increase in earnings variability was driven by widening "permanent" earnings differentials across workers and not by transitory movements in individuals' earnings; and (iii) men's earnings variability tends to be U-shaped across ages, whereas it is much flatter for women, and for both sexes earnings instability is high for young workers and decreases with age.
A longitudinal analysis of earnings change in Canada
Canadian Journal of Economics/Revue Canadienne d`Economique, 2004
This paper uses tax-based longitudinal data from the last two decades to (i) examine trends in polarization and more general distributional shifts in earnings, (ii) identify year-to-year earnings mobility patterns, and (iii) extend Beaudry and Green's (2000a) synthetic cohort analysis of ageearnings profiles to actual longitudinal data. The most marked pattern of distributional change has been the rising (real) earnings of women, increased polarization of earnings among men, and a decline in the real earnings of Entry workers (age 20-24) for both men and women. The biggest changes occurred over the recessionary years, with reverses in these latter two patterns occurring since 1994. Upwards earnings mobility is substantially higher for male than for female workers, but this gap closed significantly over the period covered, although these trends have reversed with the robust economic expansion since the mid-1990s. The cohort analysis shows steady upward shifts in the earnings profiles of those who entered the labour market in the 1960's and 1970's, followed by downward shifts for the 1980s and 1990s entry cohorts, consistent with the findings of Beaudry and Green; for the most recent (1990-1994) entry cohorts, however, the profiles appear to have steepened, suggesting returns to experience have increased for these groups. Some of the implications of these findings are discussed.
Earnings dynamics in Canada: an econometric analysis
Labour Economics, 2002
This paper reports the results of an empirical analysis of earnings dynamics in the Canadian labour market based on earnings data based drawn from tax returns between 1982 and 1994. Individuals' movements up and down quintiles of the earnings distribution are analysed using a hazard model approach. This represents one of the first studies for any country which models mobility across the entire distribution of earnings, including the middle and upper ranges as well as the lower ranges. The effects on transitions between quintiles are analyzed for the following variables: elapsed time spent in a given quintile (i.e., duration dependence effects), age, sex, geographical region, area size of residence, family status, language and overall macroeconomic conditions. One principal finding is that the conditional probability of transiting up or down the earnings distribution depends negatively on the elapsed time that an individual has spent in a given quintile. The earnings mobility patterns appear to be cyclical and exhibit some tendency of reversion to the mean, whereby the conditional probability of upward (downward) mobility is higher for those individuals presently situated in the lower (higher) quintiles.
Four Decades of Canadian Earnings Inequality and Dynamics across Workers and Firms
2021
Bank of Canada staff working papers provide a forum for staff to publish work-in-progress research independently from the Bank's Governing Council. This research may support or challenge prevailing policy orthodoxy. Therefore, the views expressed in this paper are solely those of the authors and may differ from official Bank of Canada views. No responsibility for them should be attributed to the Bank.
The Growth of Earnings Instability in the U.S. Labor Market
Brookings Papers on Economic Activity, 1994
The Growth of Earnings Instability in the U.S. Labor Market THE WIDENING EARNINGS distribution in the U.S. labor market over the 1970s and 1980s has been one of the most remarkable shifts in the structure of labor compensation in recent history-the last major shift in this distribution having occurred during the 1940s.I In the postwar period, earnings and income distributions have been regarded as stable bedrock-that is, until recently-with a common theme being the stability of those distributions in light of massive changes in labor markets and public spending on redistributive programs. Entire books were written on the subject.2 This view of long-term stability has been dramatically altered by an enormous, and still growing, series of investigations showing a widening of the income and wage distributions.3 As documented in an article by Frank Levy and Richard Murnane, the widening of the earnings distribution began gradually in the 1970s and accelerated in the 1980s.4 Earnings differentials by education and experience grew rapidly in the 1980s. A debate has now ensued concerning the causes of these trendswhether they are the result of general shifts in supply or demand caused by skill-biased technological change, shifts in the pattern of interna-We would like to thank Bill Dickens and Larry Katz for comments, and Carol Kallman and Thomas Vanderveen for research assistance. 1992). 2. See, for example, Reynolds and Smolensky (1976). 3. Two of the earliest studies were Dooley and Gottschalk (1984) and Lawrence (1984). 4. Levy and Murnane (1992). 217 218 Brookings Papers on Economic Activity, 2:1994 tional trade, changes in union rents or the minimum wage, or other factors-.
Relations industrielles, 2005
This paper examines the variability of workers’ earnings in Canada over the period 1982‑1997. Using a large panel of tax file data, we decompose total variation in earnings across workers and time into a long-run inequality component between workers and an average earnings instability component over time for workers. We find an increase in earnings variability between 1982‑89 and 1990‑97 that is largely confined to men and largely driven by widening long-run earnings inequality. Second, the pattern of unemployment rate and GDP growth rate effects on these variance components is not consistent with conventional explanations and is suggestive of an alternative paradigm of how economic growth over this period widens long-run earnings inequality. Third, when unemployment rate and GDP growth rate effects are considered jointly, macroeconomic improvement is found to reduce the overall variability of earnings as the reduction in earnings instability outweighs the widening of long-run earni...
Long-Run Inequality and Short-Run Instability of Men's and Women's Earnings in Canada
Review of Income and Wealth, 2010
This paper examines the variability of workers' earnings in Canada over the period 1982-2006. We decompose the total variance of workers' earnings into a 'permanent' component between workers and a 'transitory' earnings instability component over time for given workers. We then investigate the statistical relationships between these components and indicators for the business cycle. The most marked change in earnings variances in Canada since 1982 is the general rise in total earnings variance, which is essentially driven by a quite dramatic rise in long-run earnings inequality. The patterns across age categories of the two variance components are almost opposite. Long-run earnings inequality generally rises with age, but earnings instability is seen to generally decline with age, so that earnings instability is markedly highest among entry age workers. Unemployment rate effects are positive on almost all variance measures, while higher unemployment is associated with widened long-run earnings differentials and greater short-run earnings instability. Note: The Small Area and Administrative Data Division of Statistics Canada provided access to the LAD data upon which this study is based. Don McDougall, Roger Sceviour, and Steve McBride provided excellent computing assistance.
Cyclical Changes in Short-Run Earnings Mobility in Canada, 1982-1996
The paper by Charles M. Beach and Ross Finnie represents the first attempt to quantify short-term or cyclical changes in earnings mobility in Canada. Mobility analysis can be seen as a complement to the analysis of income distribution. For a given degree of earnings inequality, more earnings mobility corresponds to securing greater labour market opportunity. Using longitudinal income-tax-based data, the authors divide the employed population into eight age/sex groups: entry workers (20–24), younger workers (25–34), prime-age workers (35–54), and older workers (55–64) for both sexes; and divide the earnings distribution into lower, middle and upper regions or earnings intervals based on median earnings levels for the distribution as a whole, and calculate the proportion of workers in each group for all years over the 1982–96 period. They also develop transition matrices that show the probability of moving from one earnings interval to another over a one-year period. They find that th...
Earnings Dynamics and Inequality in EU, 1994-2001
SOEPpaper No. 184, 2009
The 'watch dog' role of the media, the impact of migration processes, health care access for children in developing countries, mitigation of the effects of Global Warming are typical examples of governance issues -issues to be tackled at the base; issues to be solved by creating and implementing effective policy.