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The Evolution of the Returns to Human Capital in Canada, 1980-2005

  • Boudarbat, Brahim

    ()

    (University of Montreal)

  • Lemieux, Thomas

    ()

    (University of British Columbia, Vancouver)

  • Riddell, W. Craig

    ()

    (University of British Columbia, Vancouver)

We examine the evolution of the returns to human capital in Canada over the period 1980-2005. Our main finding is that returns to education increased substantially for Canadian men, contrary to conclusions reached previously. Most of this rise took place in the early 1980s and since 1995. Returns to education also rose, albeit more modestly, for Canadian women. Another important development is that after years of expansion, the wage gap between younger and older workers stabilized after 1995. Controlling for work experience and using Canadian Census data appear to account for the main differences between our results and earlier findings.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 4809.

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Length: 46 pages
Date of creation: Mar 2010
Date of revision:
Handle: RePEc:iza:izadps:dp4809
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  1. Lawrence F. Katz & Kevin M. Murphy, 1991. "Changes in Relative Wages, 1963-1987: Supply and Demand Factors," NBER Working Papers 3927, National Bureau of Economic Research, Inc.
  2. Paul Beaudry & David Green, 1998. "What is Driving US and Canadian Wages: Exogenous Technical Change or Endogenous Choice of Technique?," NBER Working Papers 6853, National Bureau of Economic Research, Inc.
  3. Ana M. Ferrer & W. Craig Riddell, 2002. "The role of credentials in the Canadian labour market," Canadian Journal of Economics, Canadian Economics Association, vol. 35(4), pages 879-905, November.
  4. David Card & Thomas Lemieux, 2001. "Can Falling Supply Explain The Rising Return To College For Younger Men? A Cohort-Based Analysis," The Quarterly Journal of Economics, MIT Press, vol. 116(2), pages 705-746, May.
  5. Picot, Garnett & Morissette, Rene & Kapsalis, Costa, 1999. "The Returns to Education and the Increasing Wage Gap Between Younger and Older Workers," Analytical Studies Branch Research Paper Series 1999131e, Statistics Canada, Analytical Studies Branch.
  6. David Card, 2000. "Estimating the Return to Schooling: Progress on Some Persistent Econometric Problems," NBER Working Papers 7769, National Bureau of Economic Research, Inc.
  7. J.B. Burbidge & L. Magee & A.L. Robb, 2001. "The Education Premium in Canada and the United States," Quantitative Studies in Economics and Population Research Reports 364, McMaster University.
  8. Bar-Or, Yuval, et al, 1995. "The Wage Premium to a University Education in Canada, 1971-1991," Journal of Labor Economics, University of Chicago Press, vol. 13(4), pages 762-94, October.
  9. Mincer, Jacob & Polachek, Solomon, 1974. "Family Investment in Human Capital: Earnings of Women," Journal of Political Economy, University of Chicago Press, vol. 82(2), pages S76-S108, Part II, .
  10. Richard B. Freeman & Karen Needels, 1993. "Skill Differentials in Canada in an Era of Rising Labor Market Inequality," NBER Chapters, in: Small Differences That Matter: Labor Markets and Income Maintenance in Canada and the United States, pages 45-68 National Bureau of Economic Research, Inc.
  11. repec:cup:cbooks:9780521873161 is not listed on IDEAS
  12. 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.
  13. Picot, Garnett, 1998. "What is Happening to Earnings, Inequality and Youth Wages in the 1990s?," Analytical Studies Branch Research Paper Series 1998116e, Statistics Canada, Analytical Studies Branch.
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  15. Jacob A. Mincer, 1974. "Age and Experience Profiles of Earnings," NBER Chapters, in: Schooling, Experience, and Earnings, pages 64-82 National Bureau of Economic Research, Inc.
  16. Joshua Angrist & Victor Chernozhukov & Iván Fernández-Val, 2006. "Quantile Regression under Misspecification, with an Application to the U.S. Wage Structure," Econometrica, Econometric Society, vol. 74(2), pages 539-563, 03.
  17. Jacob A. Mincer, 1974. "Schooling, Experience, and Earnings," NBER Books, National Bureau of Economic Research, Inc, number minc74-1.
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  22. Jacob Mincer & Solomon Polacheck, 1974. "Family Investments in Human Capital: Earnings of Women," NBER Chapters, in: Economics of the Family: Marriage, Children, and Human Capital, pages 397-431 National Bureau of Economic Research, Inc.
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