Earnings instability
René Morissette and Yuri Ostrovsky
- Earnings instability varies considerably and is much higher among families in the bottom third of the employment income scale than among those in the top third.
- Government transfers provide a substantial offset for income losses and thus reduce income volatility. The progressive nature of income taxes further reduces volatility by restricting both income gains and income losses.
- Social assistance appears to be the single most important factor in reducing income instability among lone mothers in all age groups.
- Among unattached individuals with positive earnings in all six years of a considered period, Employment Insurance was far more important than social assistance in reducing instability.
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Authors
The authors are with the Business and Labour Market Analysis Division. René Morissette can be reached at 613-951-3608, Yuri Ostrovsky at 613-951-4229 or both at perspectives@statcan.gc.ca.
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