The Evolution of the Returns to Human Capital in Canada, 1980-2006
This paper examines the evolution of the returns to human capital in Canada over the period 1980-2006. Most of the analysis is based on Census data, and on weekly wage and salary earnings of full-time workers. Our main finding is that the returns to education increased substantially for Canadian men between 1980 and 2000, in contrast to conclusions reached in previous studies. For example, the adjusted wage gap between men with exactly a bachelorsâ€™ degree and men with only a high school diploma increased from 34 percent to 43 percent during this period. Most of this rise took place in the early 1980s and late 1990s. Returns to education also rose for Canadian women, but the magnitudes of the increases were more modest. For instance, the adjusted BA-high school wage differential among women increased about 4 percentage points between 1980 and 1985 and remained stable thereafter. Results based on Labour Force Survey data show the upward trend in returns to education has recently been reversed for both men and women. Another important development is that after fifteen years of expansion (1980-1995), the return to work experience measured by the wage gap between younger and older workers declined between 1995 and 2000. Finally, we find little difference between measures based on means and those based on medians of log wages for both genders. Also, the use of broader earnings measures (such as including self-employment earnings, using weekly earnings of all workers, or using annual earnings of full-time workers) does not alter the main conclusions from the analysis based on weekly wage and salary earnings of full-time workers.
|Date of creation:||22 Oct 2008|
|Date of revision:||22 Oct 2008|
|Contact details of provider:|| Web page: http://www.economics.ubc.ca/|
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- 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 76-108, Part II, .
- 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.
- Jacob Mincer & Solomon Polachek, 1974. "Family Investments in Human Capital: Earnings of Women," NBER Chapters,in: Marriage, Family, Human Capital, and Fertility, pages 76-110 National Bureau of Economic Research, Inc.
- 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.
- Kapsalis, Costa & Morissette, Rene & Picot, Garnett, 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.
- 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.
- Richard B. Freeman & Karen Needels, 1991. "Skill Differentials in Canada in an Era of Rising Labor Market Inequality," NBER Working Papers 3827, National Bureau of Economic Research, Inc.
- Emmanuel Saez & Michael R. Veall, 2005. "The Evolution of High Incomes in Northern America: Lessons from Canadian Evidence," American Economic Review, American Economic Association, vol. 95(3), pages 831-849, June.
- Card, David, 1999. "The causal effect of education on earnings," Handbook of Labor Economics,in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 30, pages 1801-1863 Elsevier.
- J. B. Burbidge & L. Magee & A. Leslie Robb, 2002. "The Education Premium in Canada and the United States," Canadian Public Policy, University of Toronto Press, vol. 28(2), pages 203-217, June.
- 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.
- J.B. Burbidge & L. Magee & A.L. Robb, 2001. "The Education Premium in Canada and the United States," Social and Economic Dimensions of an Aging Population Research Papers 60, McMaster University.
- 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.
- Joshua Angrist & Victor Chernozhukov & Ivan Fernandez-Val, 2004. "Quantile Regression under Misspecification, with an Application to the U.S. Wage Structure," NBER Working Papers 10428, National Bureau of Economic Research, Inc.
- Card, David, 2001. "Estimating the Return to Schooling: Progress on Some Persistent Econometric Problems," Econometrica, Econometric Society, vol. 69(5), pages 1127-1160, September.
- David Card, 2000. "Estimating the Return to Schooling: Progress on Some Persistent Econometric Problems," NBER Working Papers 7769, National Bureau of Economic Research, Inc.
- 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. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:ubc:bricol:craig_riddell-2008-15. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Maureen Chin)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.