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Mobility and Instability in Canadian Earnings

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  • Bruce Richard Kennedy

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.

Suggested Citation

  • Bruce Richard Kennedy, 1989. "Mobility and Instability in Canadian Earnings," Canadian Journal of Economics, Canadian Economics Association, vol. 22(2), pages 383-394, May.
  • Handle: RePEc:cje:issued:v:22:y:1989:i:2:p:383-94
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    Cited by:

    1. Michael Baker & Gary Solon, 2003. "Earnings Dynamics and Inequality among Canadian Men, 1976-1992: Evidence from Longitudinal Income Tax Records," Journal of Labor Economics, University of Chicago Press, vol. 21(2), pages 267-288, April.
    2. Charles Beach & Ross Finnie, 2004. "A longitudinal analysis of earnings change in Canada," Canadian Journal of Economics, Canadian Economics Association, vol. 37(1), pages 219-240, February.
    3. Scott Drewianka, 2010. "Cross-Sectional Variation In Individuals' Earnings Instability," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 56(2), pages 291-326, June.
    4. Abbott, Michael G. & Beach, Charles M., 2013. "Earnings Mobility of Canadian Immigrants: A Transition Matrix Approach," CLSSRN working papers 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, vol. 9(6), pages 763-800, December.
    6. GRIES, Thomas & PALNAU, Irene, 2016. "Distress Beyond Poverty: Spatial Patterns And Geographic Aspects Of Vulnerability In Brazil," Regional and Sectoral Economic Studies, Euro-American Association of Economic Development, vol. 16(2), pages 53-70.
    7. 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,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.

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