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The correlation of spouses' permanent and transitory earnings and family earnings inequality in Canada

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  • Ostrovsky, Yuri

Abstract

I develop a very flexible error-component model of family earnings dynamics to examine recent Canadian trends in the variance of family earnings and its components using the ‘permanent-transitory’ analytical framework. In contrast to most studies of family earnings inequality, the main focus of this paper is on the trends in the correlation between spouses' permanent and transitory earnings. I find strong evidence of an increase in the correlation of spouses' permanent earnings before 1993 and no evidence of such an increase after 1993. However, the correlation of spouses' transitory earnings steadily increased throughout the 1990s and well into the 2000s.

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Bibliographic Info

Article provided by Elsevier in its journal Labour Economics.

Volume (Year): 19 (2012)
Issue (Month): 5 ()
Pages: 756-768

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Handle: RePEc:eee:labeco:v:19:y:2012:i:5:p:756-768

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Web page: http://www.elsevier.com/locate/labeco

Related research

Keywords: Family earnings; Earnings inequality; Covariance structure; Assortative mating; Permanent earnings; Transitory earnings;

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References

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  12. Mary C. Daly & Robert G. Valletta, 2006. "Inequality and Poverty in United States: The Effects of Rising Dispersion of Men's Earnings and Changing Family Behaviour," Economica, London School of Economics and Political Science, vol. 73(289), pages 75-98, 02.
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Cited by:
  1. Bingley, Paul & Cappellari, Lorenzo, 2012. "Alike in Many Ways: Intergenerational and Sibling Correlations of Brothers' Earnings," IZA Discussion Papers 6987, Institute for the Study of Labor (IZA).
  2. Paul Bingley & Lorenzo Cappellari, 2013. "Correlation of Brothers Earnings and Intergenerational Transmission," DISCE - Working Papers del Dipartimento di Economia e Finanza def6, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).

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