The Evolution of the Returns to Human Capital in Canada, 1980-2006
AbstractThis paper examines the evolution of the returns to human capital in Canada over the period 1980-2006. Most of the analysis is based on Census data, and on weekly wage and salary earnings of full-time workers. Our main finding is that the returns to education increased substantially for Canadian men between 1980 and 2000, in contrast to conclusions reached in previous studies. For example, the adjusted wage gap between men with exactly a bachelorsâ€™ degree and men with only a high school diploma increased from 34 percent to 43 percent during this period. Most of this rise took place in the early 1980s and late 1990s. Returns to education also rose for Canadian women, but the magnitudes of the increases were more modest. For instance, the adjusted BA-high school wage differential among women increased about 4 percentage points between 1980 and 1985 and remained stable thereafter. Results based on Labour Force Survey data show the upward trend in returns to education has recently been reversed for both men and women. Another important development is that after fifteen years of expansion (1980-1995), the return to work experience measured by the wage gap between younger and older workers declined between 1995 and 2000. Finally, we find little difference between measures based on means and those based on medians of log wages for both genders. Also, the use of broader earnings measures (such as including self-employment earnings, using weekly earnings of all workers, or using annual earnings of full-time workers) does not alter the main conclusions from the analysis based on weekly wage and salary earnings of full-time workers.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Vancouver School of Economics in its series Economics working papers with number craig_riddell-2008-15.
Length: 45 pages
Date of creation: 22 Oct 2008
Date of revision: 22 Oct 2008
Contact details of provider:
Web page: http://www.economics.ubc.ca/
Human Capital; Wage Differentials; Returns to Education; Canada;
Other versions of this item:
- Boudarbat, Brahim & Lemieux, Thomas & Riddell, W. Craig, 2009. "The Evolution of the Returns to Human Capital in Canada, 1980 - 2006," CLSSRN working papers clsrn_admin-2009-8, Vancouver School of Economics, revised 02 Feb 2009.
- J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-10-28 (All new papers)
- NEP-BEC-2008-10-28 (Business Economics)
- NEP-EDU-2008-10-28 (Education)
- NEP-HRM-2008-10-28 (Human Capital & Human Resource Management)
- NEP-LAB-2008-10-28 (Labour Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- J.B. Burbidge & L. Magee & A.L. Robb, 2001.
"The Education Premium in Canada and the United States,"
Quantitative Studies in Economics and Population Research Reports
364, McMaster University.
- J. B. Burbidge & L. Magee & A. Leslie Robb, 2002. "The Education Premium in Canada and the United States," Canadian Public Policy, University of Toronto Press, vol. 28(2), pages 203-217, June.
- J.B. Burbidge & L. Magee & A.L. Robb, 2001. "The Education Premium in Canada and the United States," Social and Economic Dimensions of an Aging Population Research Papers 60, McMaster University.
- Jacob Mincer & Solomon Polacheck, 1974. "Family Investments in Human Capital: Earnings of Women," NBER Chapters, in: Economics of the Family: Marriage, Children, and Human Capital, pages 397-431 National Bureau of Economic Research, Inc.
- Jacob Mincer & Solomon Polachek, 1974.
"Family Investments in Human Capital: Earnings of Women,"
in: Marriage, Family, Human Capital, and Fertility, pages 76-110
National Bureau of Economic Research, Inc.
- Mincer, Jacob & Polachek, Solomon, 1974. "Family Investment in Human Capital: Earnings of Women," Journal of Political Economy, University of Chicago Press, vol. 82(2), pages S76-S108, Part II, .
- Richard B. Freeman & Karen Needels, 1991.
"Skill Differentials in Canada in an Era of Rising Labor Market Inequality,"
NBER Working Papers
3827, National Bureau of Economic Research, Inc.
- Richard B. Freeman & Karen Needels, 1993. "Skill Differentials in Canada in an Era of Rising Labor Market Inequality," NBER Chapters, in: Small Differences That Matter: Labor Markets and Income Maintenance in Canada and the United States, pages 45-68 National Bureau of Economic Research, Inc.
- Card, David, 2001.
"Estimating the Return to Schooling: Progress on Some Persistent Econometric Problems,"
Econometric Society, vol. 69(5), pages 1127-60, September.
- David Card, 2000. "Estimating the Return to Schooling: Progress on Some Persistent Econometric Problems," NBER Working Papers 7769, National Bureau of Economic Research, Inc.
- Kevin M. Murphy & W. Craig Riddell & Paul M. Romer, 1998. "Wages, Skills, and Technology in the United States and Canada," NBER Working Papers 6638, National Bureau of Economic Research, Inc.
- Card, David, 1999. "The causal effect of education on earnings," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 30, pages 1801-1863 Elsevier.
- Emmanuel Saez & Michael R. Veall, 2005. "The Evolution of High Incomes in Northern America: Lessons from Canadian Evidence," American Economic Review, American Economic Association, vol. 95(3), pages 831-849, June.
- Paul Beaudry & David Green, 1998. "What is Driving US and Canadian Wages: Exogenous Technical Change or Endogenous Choice of Technique?," NBER Working Papers 6853, National Bureau of Economic Research, Inc.
- Kapsalis, Costa Morissette, Rene Picot, Garnett, 1999. "The Returns to Education and the Increasing Wage Gap Between Younger and Older Workers," Analytical Studies Branch Research Paper Series 1999131e, Statistics Canada, Analytical Studies Branch.
- Emanuelle Bourbeau & Pierre Lefebvre & Philip Merrigan, 2011. "Provincial Returns to Education for 21 to 35 year-olds: Results from the 1991-2006 Canadian Analytic Censuses Files," Cahiers de recherche 1106, CIRPEE.
- Alexander Murray & Andrew Sharpe, 2011. "Human Capital and Productivity in British Columbia," CSLS Research Reports 2011-10, Centre for the Study of Living Standards.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Maureen Chin).
If references are entirely missing, you can add them using this form.