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Mobility and Instability in Canadian Earnings

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  • Bruce Richard Kennedy
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    Abstract

    A model of individual earnings dynamics that admits population heterogeneity with respect to both the level and the variability of individual earnings series is applied to an investigation of the distribution of earnings instability among mature male earners. The results tend to support Robert Gibrat's "law of proportional effect" rather than expectations based on dual labor-market theory or on the notion of compensating differentials for unemployment risk. An additional assessment of the amount of transitory variation in Canadian earnings data finds it to be small compared to the permanent component of earnings differences.

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    File URL: http://links.jstor.org/sici?sici=0008-4085%28198905%2922%3A2%3C383%3AMAIICE%3E2.0.CO%3B2-1
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    Bibliographic Info

    Article provided by Canadian Economics Association in its journal Canadian Journal of Economics.

    Volume (Year): 22 (1989)
    Issue (Month): 2 (May)
    Pages: 383-94

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    Handle: RePEc:cje:issued:v:22:y:1989:i:2:p:383-94

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    Cited by:
    1. Charles Beach & Ross Finnie, 2004. "A longitudinal analysis of earnings change in Canada," Canadian Journal of Economics, Canadian Economics Association, Canadian Economics Association, vol. 37(1), pages 219-240, February.
    2. Baker, Michael & Solon, Gary, 1999. "Earnings Dynamics and Inequality Among Canadian Men, 1976-1992: Evidence from Longitudinal Income Tax Records," Analytical Studies Branch Research Paper Series 1999130e, Statistics Canada, Analytical Studies Branch.
    3. Charles M. Beach & Ross Finnie, 2001. "Cyclical Changes in Short-Run Earnings Mobility in Canada, 1982-1996," The State of Economics in Canada: Festschrift in Honour of David Slater, Centre for the Study of Living Standards, in: Patrick Grady & Andrew Sharpe (ed.), The State of Economics in Canada: Festschrift in Honour of David Slater, pages 453-484 Centre for the Study of Living Standards.
    4. Abbott, Michael G. & Beach, Charles M., 2013. "Earnings Mobility of Canadian Immigrants: A Transition Matrix Approach," CLSSRN working papers, Vancouver School of Economics clsrn_admin-2013-47, Vancouver School of Economics, revised 27 Oct 2013.
    5. Finnie, Ross & Gray, David, 2002. "Earnings dynamics in Canada: an econometric analysis," Labour Economics, Elsevier, Elsevier, vol. 9(6), pages 763-800, December.

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