What is happening
to earnings inequality and youth wages in the 1990s?
by Garnett Picot
Business and Labour Market Analysis Division
Analytical Studies Branch
research paper series, No. 116
The increase in earnings inequality among
men in particular in Canada has been well documented. This paper adds to our knowledge
of inequality trends by addressing three issues.
First, what has happened
to earnings inequality among the employed population in the 1990s? We find that
earnings inequality and polarization increased little in the population of all
workers (men and women combined) between the mid-1980s and mid-1990s.
The
second question relates to the impact of the changing propensity of Canadians
to hold a job on earnings inequality. Put another way, if we focus on the entire
population of working age Canadians (those with and without paid employment),
what are the inequality trends? We find that earnings inequality among the working
age population changed little over the 1980s and 1990s. This analysis incorporates
both the influence of the changing employment/population ratio and inequality
trends among employed workers on overall earnings inequality among the working
age population.
But does this relative stability in overall earnings inequality
since the mid-1980s mask a number of offsetting underlying trends? Some groups
of workers are making earnings gains (notably older workers, and women) while
others are losing (notably younger workers and men). This paper also focuses on
the earnings trends among younger workers, and finds that the decline in annual
earnings of younger male workers in particular is associated with a decline in
real hourly wages.
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the full publication.
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