Working Paper: NBER ID: w21347
Authors: Thomas Lemieux; W. Craig Riddell
Abstract: This paper looks at the evolution of incomes at the top of the distribution in Canada. Master files of the Canadian Census are used to study the composition of top income earners between 1981 and 2011. Our main finding is that, as in the United States, executives and individuals working in the financial and business services sectors are the two most important groups driving the growth in top incomes in Canada. A finding more specific to Canada is that the oil and gas sector has also played an important role in income growth at the top, especially in more recent years. Another arguably Canadian-specific finding is that holders of medical degrees have lost ground compared to other top income earners. Finally, despite the IT revolution, scientists, engineers and even computer scientists do not account for much of the growth in top incomes in Canada.
Keywords: Top incomes; Income distribution; Inequality; Census data
JEL Codes: J24; J31
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| technological change (O33) | growth in top incomes (D31) |
| globalization (F60) | growth in top incomes (D31) |
| changes in labor market institutions (J08) | growth in top incomes (D31) |
| executives (M12) | growth in top incomes (D31) |
| individuals in financial and business services (G29) | growth in top incomes (D31) |
| oil and gas sector (L71) | growth in top incomes (D31) |
| holders of medical degrees (I10) | relative decline in income growth (F62) |
| professionals in science and engineering (J44) | limited contribution to growth in top incomes (F62) |
| labor earnings (J31) | primary source of income for top earners (D33) |
| growth in top incomes (D31) | cannot be solely attributed to labor effort (J29) |