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An Economic Model of the Distribution of Family Income in Canada

Author

Listed:
  • Charles Beach
  • Aidan Worswick

Abstract

This paper develops an economic model of the distribution of income based on shares of family incomes in Canada over 1976 - 2016. Major determinants of quintile and decile shares of total and market income include male and female participation rates, unemployment rate, inflation rate, GDP growth rate and manufacturing-to-services employment ratio. The analysis tests the hypothesis of GDP growth neutrality ("a rising tide lifts all boats") and strongly rejects it. It also examines the distributional benefits and losses from automation and globalization, and finds significant effects of both over the middle and upper two quintile shares, but mixed effects over the lower two quintiles.

Suggested Citation

  • Charles Beach & Aidan Worswick, 2019. "An Economic Model of the Distribution of Family Income in Canada," Working Paper 1419, Economics Department, Queen's University.
    • Handle: RePEc:qed:wpaper:1419
    as

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    File URL: https://www.econ.queensu.ca/sites/econ.queensu.ca/files/wpaper/qed_wp_1419.pdf
    File Function: First version 2019
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    References listed on IDEAS

    as
    1. David H. Autor & David Dorn & Gordon H. Hanson & Jae Song, 2014. "Trade Adjustment: Worker-Level Evidence," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 129(4), pages 1799-1860.
    2. 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.
    3. Daron Acemoglu & David Autor & David Dorn & Gordon H. Hanson & Brendan Price, 2016. "Import Competition and the Great US Employment Sag of the 2000s," Journal of Labor Economics, University of Chicago Press, vol. 34(S1), pages 141-198.
    4. Atkinson, Anthony B., 1970. "On the measurement of inequality," Journal of Economic Theory, Elsevier, vol. 2(3), pages 244-263, September.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    income share model; family income distribution; Canadian income distribution;
    All these keywords.

    JEL classification:

    • D30 - Microeconomics - - Distribution - - - General
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General

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