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

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  • Charles M. Beach
  • Ross Finnie
  • David Gray

Abstract

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.

Suggested Citation

  • Charles M. Beach & Ross Finnie & David Gray, 2003. "Earnings Variability and Earnings Instability of Women and Men in Canada: How Do the 1990s Compare to the 1980s?," Canadian Public Policy, University of Toronto Press, vol. 29(s1), pages 41-64, January.
    • Handle: RePEc:cpp:issued:v:29:y:2003:i:s1:p:41-64
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    References listed on IDEAS

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    1. Lars Osberg & Andrew Sharpe, 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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    Cited by:

    1. Kim P. Huynh & Yuri Ostrovsky & Robert J. Petrunia & Marcel C. Voia, 2017. "Industry shutdown rates and permanent layoffs: evidence from firm-worker matched data," IZA Journal of Labor Economics, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 6(1), pages 1-31, December.
    2. Ostrovsky, Yuri, 2008. "Earnings Inequality and Earnings Instability of Immigrants in Canada," Analytical Studies Branch Research Paper Series 2008309e, Statistics Canada, Analytical Studies Branch.
    3. Frank T Denton & Byron G Spencer & Terry A Yip, 2019. "Age-Income Dynamics Over The Life Course: Cohort Transition Patterns In Relative Income Based On Canadian Tax Returns," Department of Economics Working Papers 2019-02, McMaster University.
    4. Charles M. Beach & Ross Finnie & David Gray, 2010. "Long‐Run Inequality And Short‐Run Instability Of Men'S And Women'S Earnings In Canada," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 56(3), pages 572-596, September.
    5. Robert Moffitt & Peter Gottschalk, 2008. "Trends in the Transitory Variance of Male Earnings in the U.S., 1970-2004," Boston College Working Papers in Economics 697, Boston College Department of Economics.
    6. Ostrovsky Yuri, 2010. "Long-Run Earnings Inequality and Earnings Instability among Canadian Men Revisited, 1985-2005," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 10(1), pages 1-34, March.
    7. Morissette, Rene & Ostrovsky, Yuri, 2007. "Income Instability of Lone Parents, Singles and Two-Parent Families in Canada, 1984 to 2004," Analytical Studies Branch Research Paper Series 2007297e, Statistics Canada, Analytical Studies Branch.
    8. Emmanuel Saez & Michael R. Veall, 2003. "The Evolution of High Incomes in Canada, 1920-2000," Quantitative Studies in Economics and Population Research Reports 382, McMaster University.
    9. Robert A. Moffitt & Peter Gottschalk, 2012. "Trends in the Transitory Variance of Male Earnings: Methods and Evidence," Journal of Human Resources, University of Wisconsin Press, vol. 47(1), pages 204-236.
    10. Andrew Sharpe & Christopher Ross, 2011. "Living Standards Domain of the Canadian Index of Wellbeing," CSLS Research Reports 2011-17, Centre for the Study of Living Standards.
    11. Gray, David & Finnie, Ross & Beach, Charles M., 2006. "The Impact of Macroeconomic Conditions on the Instability and Long-Run Inequality of Workers' Earnings in Canada," Analytical Studies Branch Research Paper Series 2006268e, Statistics Canada, Analytical Studies Branch.

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