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Cohort patterns in Canadian earnings: assessing the role of skill premia in inequality trends

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  • Paul Beaudry
  • David A. Green

Abstract

In this paper we document the pattern of change in age-earnings profiles across cohorts and evaluate its implications. Using synthetic cohorts from the Survey of Consumer Finances over the period 1971 to 1993, we show that the age-earnings profiles of Canadian men have been deteriorating for more recent cohorts in comparison with older cohorts. We find this pattern for both high school and university educated workers. In no case do we find evidence that the return to gaining experience has been increasing over time, nor do we find increased within-cohort dispersion of earnings. We view these findings as conflicting with the hypothesis that increased skill premia largely explain the observed increase in dispersion of male weekly earnings.

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Bibliographic Info

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

Volume (Year): 33 (2000)
Issue (Month): 4 (November)
Pages: 907-936

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Handle: RePEc:cje:issued:v:33:y:2000:i:4:p:907-936

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  1. Dooley, Martin D & Gottschalk, Peter, 1984. "Earnings Inequality among Males in the United States: Trends and the Effect of Labor Force Growth," Journal of Political Economy, University of Chicago Press, vol. 92(1), pages 59-89, February.
  2. J.B. Burbidge & L. Magee & A.L. Robb, . "Cohort, Year and Age Effects in Canadian Wage Data," Canadian International Labour Network Working Papers 13, McMaster University.
  3. Burbidge, John B & Magee, Lonnie & Robb, A Leslie, 1997. "Canadian Wage Inequality over the Last Two Decades," Empirical Economics, Springer, vol. 22(2), pages 181-203.
  4. Berube, Charles & Morissette, Rene, 1996. "Longitudinal Aspects of Earnings Inequality in Canada," Analytical Studies Branch Research Paper Series 1996094e, Statistics Canada, Analytical Studies Branch.
  5. Morissette, Rene, 1995. "Why Has Inequality in Weekly Earnings Increased in Canada?," Analytical Studies Branch Research Paper Series 1995080e, Statistics Canada, Analytical Studies Branch.
  6. Juhn, Chinhui & Murphy, Kevin M & Pierce, Brooks, 1993. "Wage Inequality and the Rise in Returns to Skill," Journal of Political Economy, University of Chicago Press, vol. 101(3), pages 410-42, June.
  7. Baker, Michael & Benjamin, Dwayne, 1994. "The Performance of Immigrants in the Canadian Labor Market," Journal of Labor Economics, University of Chicago Press, vol. 12(3), pages 369-405, July.
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