cover image: The instability of family earnings and family income in Canada, 1986 to 1991 and 1996 to 2001

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The instability of family earnings and family income in Canada, 1986 to 1991 and 1996 to 2001

19 Oct 2005

Third, to what extent do wives’ earnings, taxes and transfers reduce the differences in instability that are observed between couples in the bottom of the earnings distribution and those in the top of the earnings distribution? [...] Similarly, it cannot be fully attributed to the cyclical instability of employment: approximately half of the increase in earnings instability is due to the increase in the variance of wages. [...] In Figure 1, an increase in the distance between the age-earnings profiles of high-skilled families and those of low-skilled families will cause an increase in the permanent component (i.e., an increase in inequality) while an increase in the fluctuations of earnings around a given age-earnings profile (e.g., an increase in the distance AB) will cause an increase in the transitory component (i.e., [...] It measures the average deviation, in percentage terms, of actual family earnings from expected family earnings during the observation period, i.e., the proportion of expected family earnings represented by the distance AB in Figure 1.12 To put the mean absolute deviation and σ2 w on a comparable scale, we also compute the square root of. [...] While disentangling these effects is beyond the scope of the paper, one simple way of assessing the impact of wives’ earnings on instability is to compare the instability of husbands’ earnings to the instability of earnings experienced by couples.
economics economy employment income labour labour economics mathematics unemployment employment insurance displaced workers economic inequality layoff mean correlation and dependence errors and residuals dummy variable (statistics) autocorrelation variance robustness error term serial correlation mean absolute deviation added worker effect

Authors

Morissette, R

ISBN
0662418891
Pages
49
Published in
Canada

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