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    Earnings Variability and Earnings Instability of Women and Men in Canada: How Do the 1990's Compare to the 1980's (Working Paper 25)

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    Beach_et_al_2001_Earnings_Variability.pdf (172.9Kb)
    Date
    2001-11
    Author
    Beach, Charles
    Finnie, Ross
    Gray, David
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    Abstract
    It seems to be generally assumed that earnings instability has increased in the last decade

    or so, as earnings inequality has widened, but is this indeed the case, and if so, to what degree? This

    paper builds on earlier U.S. work to look at the total variance in individuals’ earnings with a focus on

    the distinction between permanent earnings variation associated with factors such as human capital

    investments or other persistent worker attributes, and transitory earnings variation or instability for a

    given individual from one year to another. We find that there was an increase in overall earnings

    variability, especially for men, but that the greatest part of this increase was driven by the permanent

    component – that is, by a widening dispersion of (life-cycle) earnings differentials across workers. The

    increased volatility of workers’ earnings about their life-cycle earnings profiles played a secondary

    role in the overall increase in men’s earnings variability, whereas for women this effect was very small

    or even worked in the opposite direction (depending on the particular age group). Patterns by age

    and region are also investigated.
    URI for this record
    http://hdl.handle.net/1974/14885
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