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Earnings Variability and Earnings Instability of Women and Men in Canada: How Do the 1990s Compare to the 1980s?

  • Charles M. Beach
  • Ross Finnie
  • David Gray

This paper uses LAD panel data to investigate how variability of workers' earnings and earnings instability for Canada changed between 1982­89 and 1990­97. Following the methodology of Gottschalk and Moffitt (1994), we decompose the total variation of workers' earnings into permanent variation and a transitory component (or earnings instability). It is found that: (i) there has been an increase in overall earnings variability among Canadian workers between the two sub-periods, with the increase much more marked among men, particularly with non-continuous labour market attachment; (ii) the greatest part of this increase in earnings variability was driven by widening "permanent" earnings differentials across workers and not by transitory movements in individuals' earnings; and (iii) men's earnings variability tends to be U-shaped across ages, whereas it is much flatter for women, and for both sexes earnings instability is high for young wor kers and decreases with age.

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Article provided by University of Toronto Press in its journal Canadian Public Policy.

Volume (Year): 29 (2003)
Issue (Month): s1 (January)
Pages: 41-64

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Handle: RePEc:cpp:issued:v:29:y:2003:i:s1:p:41-64
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  1. Osberg, Lars & Sharpe, Andrew, 2002. "An Index of Economic Well-Being for Selected OECD Countries," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 48(3), pages 291-316, September.
  2. Berube, Charles & Morissette, Rene, 1996. "Longitudinal Aspects of Earnings Inequality in Canada," Analytical Studies Branch Research Paper Series 1996094e, Statistics Canada, Analytical Studies Branch.
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