Increasing Male Earnings Inequality in Canada and the United States, 19811997: The Role of Hours Changes versus Wage Changes
This paper looks at changes in hourly wages and hours worked per week of prime-age males in different skill groups (measured by earnings quintile) in the United States and Canada from 1981 to 1997. The analysis reveals that increases in hourly wage inequality are primarily responsible for increases in weekly earnings inequality in both countries. Increases in the dispersion of hours worked per week play a more important part in explaining the increase in earnings inequality in Canada than in the United States. High-skill workers experienced increases in earnings growth due to increases in hours and, at least for the US, increases in wages. In contrast, low-skill workers experienced declines in earnings growth due to decreases in wages and hours. This evidence is consistent with a skill-biased demand shock. In Canada a larger percentage of the reduction in earnings of low-skill workers is accounted for by declining hours. This evidence suggests a higher degree of downward wage rigidity in Canada than in the United States.
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Volume (Year): 30 (2004)
Issue (Month): 2 (June)
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References listed on IDEAS
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- Morissette, Rene, 1995. "Why Has Inequality in Weekly Earnings Increased in Canada?," Analytical Studies Branch Research Paper Series 1995080e, Statistics Canada, Analytical Studies Branch.
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- Wasmer, Etienne, 2001.
"Between-Group Competition In The Labour Market And The Rising Returns To Skill: US And France 1964-2000,"
CEPR Discussion Papers
2798, C.E.P.R. Discussion Papers.
- Wasmer, Etienne, 2001. "Between-group Competition in the Labor Market and the Rising Returns to Skill: US and France 1964-2000," IZA Discussion Papers 292, Institute for the Study of Labor (IZA).
- Murphy, Kevin M & Welch, Finis, 1993. "Inequality and Relative Wages," American Economic Review, American Economic Association, vol. 83(2), pages 104-09, May.
- 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.
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