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What Caused Earnings Inequality to Increase in Canada during the 1980s?

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  • MacPhail, Fiona

Abstract

While broad consensus exists that earnings inequality increased in Canada during the 1980s, as in other industrialised countries, there is little agreement about the causes. The main contribution of this paper is the simultaneous, empirical examination of eight hypotheses of increased earnings inequality, using multivariate regression analysis, namely: the decline in unionisation, minimum wages and industrialisation, as well as the increase in unemployment, trade, relative supply of university-educated workers and relative supply of female workers, and technological change. In Canada, during the 1980s, employment and unionisation factors strongly and consistently explain the increase in annual earnings and hourly wage-rate inequality, after controlling for six other possible determinants. The results also point to the importance of considering a multidimensional explanation of increased earnings inequality and avoiding generalisations across gender, income and work status groups. Copyright 2000 by Oxford University Press.

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  • MacPhail, Fiona, 2000. "What Caused Earnings Inequality to Increase in Canada during the 1980s?," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 24(2), pages 153-175, March.
    • Handle: RePEc:oup:cambje:v:24:y:2000:i:2:p:153-75
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    Cited by:

    1. Naderi, A. & Mace, J., 2003. "Education and earnings: a multilevel analysis: A case study of the manufacturing sector in Iran," Economics of Education Review, Elsevier, vol. 22(2), pages 143-156, April.
    2. Thanos Fragkandreas, 2022. "Three Decades of Research on Innovation and Inequality: Causal Scenarios, Explanatory Factors, and Suggestions," Working Papers 60, Birkbeck Centre for Innovation Management Research, revised Feb 2022.
    3. Kenyon Bolton & Sébastien Breau, 2012. "Growing Unequal? Changes in the Distribution of Earnings across Canadian Cities," Urban Studies, Urban Studies Journal Limited, vol. 49(6), pages 1377-1396, May.
    4. Diana Barros & Aurora A. C. Teixeira, 2021. "Unlocking the black box: A comprehensive meta-analysis of the main determinants of within-region income inequality," Review of Regional Research: Jahrbuch für Regionalwissenschaft, Springer;Gesellschaft für Regionalforschung (GfR), vol. 41(1), pages 55-93, February.
    5. Cortez, Willy W., 2001. "What is Behind Increasing Wage Inequality in Mexico?," World Development, Elsevier, vol. 29(11), pages 1905-1922, November.

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