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Longitudinal Aspects of Earnings Inequality in Canada

  • Berube, Charles
  • Morissette, Rene
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    In this paper we ask the three following questions : 1) even after controlling for cyclical effects, do new spells of low earnings now last longer than they used to? 2) once a male worker starts a new spell of low earnings, does he receive lower real annual wages now than his counterparts did in the mid-seventies? 3) has long-term inequality in earnings risen in the eighties? The answers to these questions are the following. First, even after taking account of the relatively high unemployment rates observed since the mid-eighties, it was harder for Canadian male workers, especially those aged 18-24, to move out of the bottom of the earnings distribution during the 1985-93 period than during the 1975-84 period. In other terms, new spells of low earnings now last longer for these workers. Second, real annual wages received by young males who went through a new spell of low earnings were significantly lower in 1985-93 than in 1975-84. Third, during the eighties, inequality in earnings cumulated over either six or ten years rose at the same pace as inequality in annual earnings.

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    File URL: http://www5.statcan.gc.ca/olc-cel/olc.action?ObjId=11F0019M1996094&ObjType=46&lang=en&limit=0
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    Paper provided by Statistics Canada, Analytical Studies Branch in its series Analytical Studies Branch Research Paper Series with number 1996094e.

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    Date of creation: 30 Aug 1996
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    Handle: RePEc:stc:stcp3e:1996094e
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    Web page: http://www.statcan.gc.ca

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    1. Blanchflower, D. & Oswald, A., 1989. "The Wage Curve," Papers 340, London School of Economics - Centre for Labour Economics.
    2. Morissette, Rene, 1995. "Why Has Inequality in Weekly Earnings Increased in Canada?," Analytical Studies Branch Research Paper Series 1995080e, Statistics Canada, Analytical Studies Branch.
    3. Murphy, Kevin M & Welch, Finis, 1992. "The Structure of Wages," The Quarterly Journal of Economics, MIT Press, vol. 107(1), pages 285-326, February.
    4. Mary Jo Bane & David T. Ellwood, 1986. "Slipping into and out of Poverty: The Dynamics of Spells," Journal of Human Resources, University of Wisconsin Press, vol. 21(1), pages 1-23.
    5. Patricia Smith, 1994. "Recent patterns in downward income mobility: Sinking boats in a rising tide," Social Indicators Research, Springer, vol. 31(3), pages 277-303, March.
    6. Beach, C.M. & Slotsve, G.A., 1994. "Polarization of Earnings in the Canadian Labour Market: A Non-Microdata Approach," Working Papers 17, John Deutsch Institute for the Study of Economic Policy.
    7. Hungerford, Thomas L, 1993. "U.S. Income Mobility in the Seventies and Eighties," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 39(4), pages 403-17, December.
    8. Juhn, Chinhui & Murphy, Kevin M & Pierce, Brooks, 1993. "Wage Inequality and the Rise in Returns to Skill," Journal of Political Economy, University of Chicago Press, vol. 101(3), pages 410-42, June.
    9. Kiefer, Nicholas M, 1988. "Economic Duration Data and Hazard Functions," Journal of Economic Literature, American Economic Association, vol. 26(2), pages 646-79, June.
    10. 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.
    11. Doiron, Denise J & Barrett, Garry F, 1996. "Inequality in Male and Female Earnings: The Role of Hours and Wages," The Review of Economics and Statistics, MIT Press, vol. 78(3), pages 410-20, August.
    12. Greg J. Duncan & Timothy M. Smeeding & Willard Rodgers, 1991. "Whither the Middle Class'? A Dynamic View," Economics Working Paper Archive wp_56, Levy Economics Institute.
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