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More Evidence on the Effect of Higher Unemployment on the Canadian Size Distribution of Income

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  • Susan Johnson

Abstract

This paper provides evidence that cyclical unemployment is associated with increased income inequality in Canada. The empirical results reinforce the recent findings of Erksoy (1981-1987). Erksoy used a dynamic micro-simulation to model the period from 1981 to 1987. In contrast to his work, my paper takes a macroeconomic perspective and uses an income share model. I examine the period from 1981 to 1992 using data from the "Survey of Consumer Finances." It is striking that two such different approaches reach the same conclusion.

Suggested Citation

  • Susan Johnson, 1995. "More Evidence on the Effect of Higher Unemployment on the Canadian Size Distribution of Income," Canadian Public Policy, University of Toronto Press, vol. 21(4), pages 423-428, December.
    • Handle: RePEc:cpp:issued:v:21:y:1995:i:4:p:423-428
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    References listed on IDEAS

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    1. Adolf Buse, 1982. "The Cyclical Behaviour of the Size Distribution of Income in Canada: 1947-78," Canadian Journal of Economics, Canadian Economics Association, vol. 15(2), pages 189-204, May.
    2. Blinder, Alan S & Esaki, Howard Y, 1978. "Macroeconomic Activity and Income Distribution in the Postwar United States," The Review of Economics and Statistics, MIT Press, vol. 60(4), pages 604-609, November.
    3. Brian Nolan, 1989. "Macroeconomic Conditions and the Size Distribution of Income: Evidence from the United Kingdom," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 11(2), pages 196-221, December.
    4. Rebecca M. Blank & Alan S. Blinder, 1985. "Macroeconomics, Income Distribution, and Poverty," NBER Working Papers 1567, National Bureau of Economic Research, Inc.
    5. Charles Beach, 1976. "Cyclical Impacts on the Personal Distribution of Income," NBER Chapters, in: Annals of Economic and Social Measurement, Volume 5, number 1, pages 29-52, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Sharpe, Andrew & Zyblock, Myles, 1997. "Macroeconomic performance and income distribution in Canada," The North American Journal of Economics and Finance, Elsevier, vol. 8(2), pages 167-199.
    2. Marc Frenette & David A. Green & Kevin Milligan, 2007. "The tale of the tails: Canadian income inequality in the 1980s and 1990s," Canadian Journal of Economics, Canadian Economics Association, vol. 40(3), pages 734-764, August.
    3. Green, David A. & Milligan, Kevin & Frenette, Marc, 2006. "Revisiting Recent Trends in Canadian After-Tax Income Inequality Using Census Data," Analytical Studies Branch Research Paper Series 2006274e, Statistics Canada, Analytical Studies Branch.

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