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- Articles and reports: 11F0019M1995082Geography: CanadaDescription:
Our aim in this paper is to resolve a paradox. Since the 1970s, there has been a downward secular trend in the average real and relative earnings of young adults under the age of 35. Despite the fact that most young children live in households headed by adults under 35, there has been no corresponding secular rise in the incidence of low income among children. Rather child poverty has followed the usual fluctuations of the business cycle.
We show that the relative stability in child poverty rates in the face of declining labour market earnings is a result of two factors. First, the decline in market income in young households with children has been offset by rising transfers. Since the 1970s, social transfers have replaced earnings as the main source of income among low income families with children.
Second, changes in the fertility behaviour and labour market characteristics of young adults have sharply reduced the risk of young children growing up in low income households. Today's young parents are better educated, working more hours, having fewer children, and postponing child-birth until later ages when earnings are higher. Although more children do find themselves in single parent families, this change has been swamped by other changes in family patterns and labour market behaviour that have reduced the risk of child poverty.
Thus, the upward pressure on low income among children stemming from the labour market has been offset by social transfers, on the one hand, and by changes in family formation and the labour market behaviour of young adults, on the other. Except for cyclical variations, the result has been relative stability in the incidence of low income among children over the 1980s and early 1990s. Whether these offsetting patterns will continue in the last half of the 1990s remains to be seen.
Release date: 1995-09-30 - Articles and reports: 11F0019M1995080Geography: CanadaDescription:
Inequality in weekly earnings increased in the eighties in Canada. The growth in inequality occurred in conjunction with three facts. First, real hourly wages of young workers dropped more than 10%. Second, the percentage of employees working 35-40 hours per week in their main job fell and the fraction of employees working 50 hours or more per week rose. Third, there was a growing tendency for highly paid workers to work long workweeks. We argue that any set of explanations of the increase in weekly earnings inequality must reconcile these three facts. Sectoral changes in the distribution of employment by industry and union status explain roughly 30% of the rise in inequality. The reduction in real minimum wages and the decline of average firm size explain very little of the growth in age-earnings differentials. Skill-biased technological change could have increased both the dispersion of hourly wages and the dispersion of weekly hours of work and thus, is consistent a priori with the movements observed. Yet other factors may have played an equally important - if not more important - role. The growth in competitive pressures, possible shifts in the bargaining power (between firms and labour) towards firms, the greater locational mobility of firms, the increase in Canada's openness to international trade, the rise in fixed costs of labour and possibly in training costs may be major factors behind the growth in weekly earnings inequality in Canada.
Release date: 1995-07-30 - 3. Work and low income ArchivedArticles and reports: 75-001-X19950021592Geography: CanadaDescription:
A description of the volume of paid work done in 1992 by low income families headed by a person under 65, comparing the number of weeks worked by these families with the number of weeks worked by other families.
Release date: 1995-06-01
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Analysis (3)
Analysis (3) ((3 results))
- Articles and reports: 11F0019M1995082Geography: CanadaDescription:
Our aim in this paper is to resolve a paradox. Since the 1970s, there has been a downward secular trend in the average real and relative earnings of young adults under the age of 35. Despite the fact that most young children live in households headed by adults under 35, there has been no corresponding secular rise in the incidence of low income among children. Rather child poverty has followed the usual fluctuations of the business cycle.
We show that the relative stability in child poverty rates in the face of declining labour market earnings is a result of two factors. First, the decline in market income in young households with children has been offset by rising transfers. Since the 1970s, social transfers have replaced earnings as the main source of income among low income families with children.
Second, changes in the fertility behaviour and labour market characteristics of young adults have sharply reduced the risk of young children growing up in low income households. Today's young parents are better educated, working more hours, having fewer children, and postponing child-birth until later ages when earnings are higher. Although more children do find themselves in single parent families, this change has been swamped by other changes in family patterns and labour market behaviour that have reduced the risk of child poverty.
Thus, the upward pressure on low income among children stemming from the labour market has been offset by social transfers, on the one hand, and by changes in family formation and the labour market behaviour of young adults, on the other. Except for cyclical variations, the result has been relative stability in the incidence of low income among children over the 1980s and early 1990s. Whether these offsetting patterns will continue in the last half of the 1990s remains to be seen.
Release date: 1995-09-30 - Articles and reports: 11F0019M1995080Geography: CanadaDescription:
Inequality in weekly earnings increased in the eighties in Canada. The growth in inequality occurred in conjunction with three facts. First, real hourly wages of young workers dropped more than 10%. Second, the percentage of employees working 35-40 hours per week in their main job fell and the fraction of employees working 50 hours or more per week rose. Third, there was a growing tendency for highly paid workers to work long workweeks. We argue that any set of explanations of the increase in weekly earnings inequality must reconcile these three facts. Sectoral changes in the distribution of employment by industry and union status explain roughly 30% of the rise in inequality. The reduction in real minimum wages and the decline of average firm size explain very little of the growth in age-earnings differentials. Skill-biased technological change could have increased both the dispersion of hourly wages and the dispersion of weekly hours of work and thus, is consistent a priori with the movements observed. Yet other factors may have played an equally important - if not more important - role. The growth in competitive pressures, possible shifts in the bargaining power (between firms and labour) towards firms, the greater locational mobility of firms, the increase in Canada's openness to international trade, the rise in fixed costs of labour and possibly in training costs may be major factors behind the growth in weekly earnings inequality in Canada.
Release date: 1995-07-30 - 3. Work and low income ArchivedArticles and reports: 75-001-X19950021592Geography: CanadaDescription:
A description of the volume of paid work done in 1992 by low income families headed by a person under 65, comparing the number of weeks worked by these families with the number of weeks worked by other families.
Release date: 1995-06-01
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