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A longitudinal analysis of earnings change in Canada

  • Charles Beach
  • Ross Finnie

We use tax-based longitudinal microdata for 1982-99 to (i) examine how earnings distributions have shifted, (ii) identify changes in earnings mobility patterns, and (iii) replicate and update Beaudry and Green's cohort analysis of age-earnings profiles. We find: (i) increased polarization of men's earnings and marked decline in real earnings of workers aged 20-4; (ii) general decline in men's earnings mobility, while women's mobility has increased for young and prime-age workers; and (iii) upward drift in earnings profiles of 1960s-1970s entry cohorts and downward shifts for 1980s-1990s cohorts (largely confirming Beaudry and Green's findings), but suggestive of steepening profiles for the 1990s cohorts.

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

Volume (Year): 37 (2004)
Issue (Month): 1 (February)
Pages: 219-240

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Handle: RePEc:cje:issued:v:37:y:2004:i:1:p:219-240
Contact details of provider: Postal: Canadian Economics Association Prof. Steven Ambler, Secretary-Treasurer c/o Olivier Lebert, CEA/CJE/CPP Office C.P. 35006, 1221 Fleury Est Montréal, Québec, Canada H2C 3K4
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  1. Berube, Charles & Morissette, Rene, 1996. "Longitudinal Aspects of Earnings Inequality in Canada," Analytical Studies Branch Research Paper Series 1996094e, Statistics Canada, Analytical Studies Branch.
  2. Peter Gottschalk & Timothy M. Smeeding, 1997. "Cross-National Comparisons of Earnings and Income Inequality," Journal of Economic Literature, American Economic Association, vol. 35(2), pages 633-687, June.
  3. Heisz, Andrew & Corak, Miles, 1996. "The Intergenerational Income Mobility of Canadian Men," Analytical Studies Branch Research Paper Series 1996089e, Statistics Canada, Analytical Studies Branch.
  4. Paul Beaudry & David A. Green, 2000. "Cohort patterns in Canadian earnings: assessing the role of skill premia in inequality trends," Canadian Journal of Economics, Canadian Economics Association, vol. 33(4), pages 907-936, November.
  5. Moshe Buchinsky & Jennifer Hunt, 1996. "Wage Mobility in the United States," NBER Working Papers 5455, National Bureau of Economic Research, Inc.
  6. Dardanoni Valentino, 1993. "Measuring Social Mobility," Journal of Economic Theory, Elsevier, vol. 61(2), pages 372-394, December.
  7. Shorrocks, Anthony, 1978. "Income inequality and income mobility," Journal of Economic Theory, Elsevier, vol. 19(2), pages 376-393, December.
  8. Bruce Richard Kennedy, 1989. "Mobility and Instability in Canadian Earnings," Canadian Journal of Economics, Canadian Economics Association, vol. 22(2), pages 383-94, May.
  9. Peter Gottschalk & Robert Moffitt, 1994. "The Growth of Earnings Instability in the U.S. Labor Market," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 25(2), pages 217-272.
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