Cyclical Changes in Short-Run Earnings Mobility in Canada, 1982-1996

fall by 1.63 percentage points. The unemployment rate effect on the average
net probability of moving up for women is only about a third that of men.

Fourth, it is found for men that the cyclical sensitivity of earnings
mobility decreases monotonically with age — strongest among entry age
workers and weakest for older workers. So the cross-sectional, age-earnings
profiles swivel downward and become steeper in recessions and swivel
upward and become flatter over economic expansions. For women workers,
the net cyclical effects on earnings mobility are far smaller showing no such
statistically significant pattern.

References

Abowd, J. and D. Card (1989), “On the Covariance Structure of Earnings and Hours
Changes”, Econometrica 57(2), 411-445.

Amemiya, T. (1985), Advanced Econometrics (Cambridge, MA: Harvard University
Press), ch. 11.

Atkinson, A.B., F. Bourguignon and C. Morrison (1992), Empirical Studies of Earnings
Mobility (Chur, UK: Harwood Academic Publishers).

Baker, M. and G. Solon (1999), “Earnings Dynamics and Inequality among Canadian Men,
1976-1992: Evidence from Longitudinal Income Tax Records”, unpublished paper
(Toronto).

Beach, C.M. and G.A. Slotsve (1996), Are We Becoming Two Societies? Income
Polarization and the Middle Class in Canada (Toronto: C.D. Howe Institute).

Beach, C.M. and R. Finnie (1998), “Earnings Mobility 1982-1994: Women Gaining Ground
and Lower Paid Males Slipping”, Canadian Business Economics 6(4), 3-25.

__________(2000), “Trends in Short-Run Earnings Mobility in Canada, 1982-1996”,
unpublished paper (Kingston).

__________(2001), “Cyclical Changes in Short-Run Earnings Mobility in Canada, 1982-
1996”, unpublished paper (Kingston).

Beaudry, P. and D. Green (2000), “Cohort Patterns in Canadian Earnings: Assessing the
Role of Skill Premia in Inequality Trends”, Canadian Journal of Economics 33(4),
907-936.

Buchinsky, M. and J. Hunt (1996), “Wage Mobility in the United States”, NBER Working
Paper No. 5455 (Cambridge, MA: National Bureau of Economic Research).

Burkhauser, R.V., D. Holtz-Eakin and S.E. Rhody (1997), “Labor Earnings Mobility and
Inequality in the United States and Germany During the Growth Years of the 1980s”,
NBER Working Paper No. 5988 (Cambridge, MA: National Bureau of Economic
Research).

Duncan, G.J., T.M. Smeeding and W. Rodgers (1994), “W(h)ither the Middle Class? A
Dynamic View”, in E. Wolff (ed.), Poverty and Prosperity in the U.S. at the End of
the Twentieth Century (New York: Macmillan), 202-271.

Charles M. Beach and Ross Finnie

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