Earnings Variability and Earnings Instability of Women and Men in Canada: How Do the 1990s Compare to the 1980s?

Charles Beach, Ross Finnie () and David Gray

Canadian Public Policy, 2003, vol. 29, issue s1, 41-64

Abstract: This paper uses LAD panel data to investigate how variability of workers' earnings and earnings instability for Canada changed between 1982­89 and 1990­97. Following the methodology of Gottschalk and Moffitt (1994), we decompose the total variation of workers' earnings into permanent variation and a transitory component (or earnings instability). It is found that: (i) there has been an increase in overall earnings variability among Canadian workers between the two sub-periods, with the increase much more marked among men, particularly with non-continuous labour market attachment; (ii) the greatest part of this increase in earnings variability was driven by widening "permanent" earnings differentials across workers and not by transitory movements in individuals' earnings; and (iii) men's earnings variability tends to be U-shaped across ages, whereas it is much flatter for women, and for both sexes earnings instability is high for young wor kers and decreases with age.

Date: 2003
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