The correlation of spouses' permanent and transitory earnings and family earnings inequality in Canada

Yuri Ostrovsky

Labour Economics, 2012, vol. 19, issue 5, 756-768

Abstract: I develop a very flexible error-component model of family earnings dynamics to examine recent Canadian trends in the variance of family earnings and its components using the ‘permanent-transitory’ analytical framework. In contrast to most studies of family earnings inequality, the main focus of this paper is on the trends in the correlation between spouses' permanent and transitory earnings. I find strong evidence of an increase in the correlation of spouses' permanent earnings before 1993 and no evidence of such an increase after 1993. However, the correlation of spouses' transitory earnings steadily increased throughout the 1990s and well into the 2000s.

Keywords: Family earnings; Earnings inequality; Covariance structure; Assortative mating; Permanent earnings; Transitory earnings (search for similar items in EconPapers)
JEL-codes: D31 J31 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (15)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:labeco:v:19:y:2012:i:5:p:756-768

DOI: 10.1016/j.labeco.2012.07.005

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