A longitudinal analysis of earnings change in Canada
Charles Beach and Ross Finnie,
Department of Economics, Queen's University
Business and Labour Market Analysis Division
Analytical Studies Branch research paper series, No. 227
Canadian Journal of Economics , Volume 37, no. 1
Context
Earnings mobility, that is changes in the relative earnings of individuals
over time, is viewed as an indicator of equality of opportunity in the
labour market, particularly in a life-cycle career framework where young
workers may start off with relatively low earnings and, through work
experience and training, move up through the earnings distribution over
their career. Recent work has linked mobility to economic well-being.
Objectives
The goal of this paper is to examine how earnings distributions have
shifted, identify changes on earnings mobility patterns and replicate
and update Beaudry and Green's cohort analysis of age-earnings profiles.
Findings
The most marked pattern of distributional change has been the rising
real earnings of women relative to the median as the proportions of
women workers in the lower earnings intervals have been declining and
those in the upper intervals have been generally rising.
There has been an increased polarization of men's earnings and a marked
decline in real earnings of workers aged 20 to 24.
The results also indicate a general decline in men's earnings mobility
while women's earnings mobility has increased for young and prime aged
workers.
The cohort analysis shows steady upward shifts in the earnings profiles
of those who entered the labour market in the 1960s and 1970s followed
by downward shifts for the 1980s and 1990s entry cohorts (largely confirming
Beaudry and Green's findings). For the entry cohorts between 1990 and
1994, the profiles have appeared to have steepened.
Data source: Longitudinal Administrative Databank,
1982 to 1999.
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the full publication.
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