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Long-Run Earnings Inequality and Earnings Instability among Canadian Men Revisited, 1985-2005

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  • Ostrovsky Yuri

    ()
    (Statistics Canada)

Abstract

I consider two flexible models of earnings dynamics suggested in the recent literature and alternative approaches to the treatment of left-censored observations to examine trends in the permanent and transitory variances of earnings of Canadian male workers from 1985 to 2005. I find that both permanent and transitory variances were higher in the 2000s than in the late 1980s or 1990s. In contrast to the late 1980s and the recession period of the early 1990s, both components of variance grew at a similar pace during the post-recession period, and the share of each component in the total variance remained fairly stable. The results are robust to the choice of a model. The study is based on a large sample from a uniquely rich longitudinal administrative dataset.

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Bibliographic Info

Article provided by De Gruyter in its journal The B.E. Journal of Economic Analysis & Policy.

Volume (Year): 10 (2010)
Issue (Month): 1 (March)
Pages: 1-34

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Handle: RePEc:bpj:bejeap:v:10:y:2010:i:1:n:20

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Cited by:
  1. Ostrovsky, Yuri, 2012. "The correlation of spouses' permanent and transitory earnings and family earnings inequality in Canada," Labour Economics, Elsevier, vol. 19(5), pages 756-768.
  2. Richard Blundell & Michael Graber & Magne Mogstad, 2014. "Labor income dynamics and the insurance from taxes, transfers and the family," IFS Working Papers W14/01, Institute for Fiscal Studies.

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