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September 1, 2014
 
 
Canadian Excellence

Susan Johnson




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Susan Johnson

Increasing Male Earnings Inequality in Canada and the United States, 1981-1997: The Role of Hours Changes versus Wage Changes (ABSTRACT)


Johnson, S., & Kuhn, P.

published: 2004 | Research publication | Refereed Journals - Economics

Johnson, S., & Kuhn, P. (2004). "Increasing Male Earnings Inequality in Canada and the United States, 1981-1997: The Role of Hours Changes versus Wage Changes". Canadian Public Policy, 30 (2), 155-175.


ABSTRACT: This paper looks at changes in hourly wages and hours worked per week of prime-age males in different skill groups (measured by earnings quintile) in the United States and Canada from 1981 to 1997. The analysis reveals that increases in hourly wage inequality are primarily responsible for increases in weekly earnings inequality in both countries. Increases in the dispersion of hours worked per week play a more important part in explaining the increase in earnings inequality in Canada than in the United States. high-skill workers experienced increases in earnings growth due to increases in hours, and at least for the US, increases in wages. In contrast, low-skill workers experienced declines in earnings growth due to decreases in wages and hours. This evidence is consistent with a skill-biased demand shock. In Canada a larger percentage of the reduction in earnings of low-skill workers is accounted for by declining hours. This evidence suggests a higher degree of downward wage rigidity in Canada than in the US.

 

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revised Dec 15/05

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