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What Has Happened to Middle-Class Earnings? Distributional Shifts in Earnings in Canada, 1970-2005

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  • Beach, Charles M.

Abstract

This paper examines how middle-class earnings in Canada have changed between 1970 and 2005 using Census microdata. Middle-class earnings are defined as workers’ earnings between 50 and 150 percent of the median or as earnings between the 20th and 80th percentile earnings. The analysis looks at the proportion of workers (“workers’ share†) with middle-class earnings and the proportion of earnings (“earnings share†) received by middle-class workers. The study finds: (i) there has been a marked decline of full-time full-year middle-class workers and corresponding marked increases of higher- and lower-earning workers in the Canadian workplace; (ii) there has been an even larger shift in earnings with middle-class workers losing out to strong earnings gains of higher-earning workers; and (iii) the majority of the decline of the middle-class earnings share was due to the fall in their workers’ share for male and for full-time full-year female workers.

Suggested Citation

  • Beach, Charles M., 2014. "What Has Happened to Middle-Class Earnings? Distributional Shifts in Earnings in Canada, 1970-2005," CLSSRN working papers clsrn_admin-2014-13, Vancouver School of Economics, revised 26 Mar 2014.
  • Handle: RePEc:ubc:clssrn:clsrn_admin-2014-13
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    File URL: http://www.clsrn.econ.ubc.ca/workingpapers/CLSRN%20Working%20Paper%20no.%20131%20-%20Beach.pdf
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    References listed on IDEAS

    as
    1. Maarten Goos & Alan Manning & Anna Salomons, 2009. "Job Polarization in Europe," American Economic Review, American Economic Association, vol. 99(2), pages 58-63, May.
    2. Michael R. Veall, 2012. "Top income shares in Canada: recent trends and policy implications," Canadian Journal of Economics, Canadian Economics Association, vol. 45(4), pages 1247-1272, November.
    3. Enrico Moretti, 2013. "Real Wage Inequality," American Economic Journal: Applied Economics, American Economic Association, vol. 5(1), pages 65-103, January.
    4. David A. Green & Benjamin M. Sand, 2015. "Has the Canadian labour market polarized?," Canadian Journal of Economics, Canadian Economics Association, vol. 48(2), pages 612-646, May.
    5. Katz, Lawrence F. & Autor, David H., 1999. "Changes in the wage structure and earnings inequality," Handbook of Labor Economics,in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 26, pages 1463-1555 Elsevier.
    6. Anthony B. Atkinson & Andrea Brandolini, 2011. "On the identification of the “middle class”," Working Papers 217, ECINEQ, Society for the Study of Economic Inequality.
    7. James Foster & Michael Wolfson, 2010. "Polarization and the decline of the middle class: Canada and the U.S," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 8(2), pages 247-273, June.
    8. David H. Autor & David Dorn & Gordon H. Hanson, 2015. "Untangling Trade and Technology: Evidence from Local Labour Markets," Economic Journal, Royal Economic Society, vol. 0(584), pages 621-646, May.
    9. Joseph Eisenhauer, 2008. "An Economic Definition of the Middle Class," Forum for Social Economics, Taylor & Francis Journals, vol. 37(2), pages 103-113, January.
    10. Acemoglu, Daron & Autor, David, 2011. "Skills, Tasks and Technologies: Implications for Employment and Earnings," Handbook of Labor Economics, Elsevier.
    11. Joseph Eisenhauer, 2008. "An Economic Definition of the Middle Class," Forum for Social Economics, Springer;The Association for Social Economics, vol. 37(2), pages 103-113, August.
    12. repec:mes:jeciss:v:41:y:2007:i:1:p:181-200 is not listed on IDEAS
    13. 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.
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    More about this item

    Keywords

    middle-class earnings; polarization of earnings; Canadian inequality;

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J39 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Other

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