Krishna Pendakur

The Colour of Money: Earnings Differentials Among Ethnic Groups in Canada

The literature on ethnically based earnings differentials in Canada has focused on differences either between whites and visible minorities or between particular ethnic groups. In this paper, the authors examine both earnings differentials between whites and visible minorities, and earnings differentials within the white and visible-minority groupings. Among both men and women they find substantial earnings differentials both between and within the white and visible-minority groupings. Differentials between whites and visible minorities suggest that the visible-minority category is a useful indicator of economic discrimination. Differentials within these groupings, however, suggest that it is only a rough indicator.

Semiparametric estimation and consumer demand

This paper considers the implementation of semiparametric methods in the empirical analysis of consumer demand. The application is to the estimation of the Engel curve relationship and uses the British Family Expenditure Survey. Household composition is modelled using an extended partially linear framework. This is shown to provide a useful method for pooling non-parametric Engel curves across households of different demographic composition.

Tricks With Hicks: The Easi Demand System

We invent Implicit Marshallian demands, which combine desirable features of Hicksian and Marshallian demands. We propose and estimate the Exact Affine Stone Index (EASI) implicit Marshallian demand system. Like the Almost Ideal Demand (AID) system, EASI budget shares are linear in parameters given real expenditures. However, unlike the AID, EASI demands can have any rank and its Engel curves can have any shape over real expenditures. EASI error terms equal random utility parameters to account for unobserved preference heterogeneity. EASI demand functions can be estimated using GMM or three stage least squares, and, like AID, an approximate EASI model can be estimated by linear regression. (JEL D11, D12)

Semiparametric estimates and tests of base-independent equivalence scales

A seal clearance is automatically maintained between the mating ends of two ducts the minor one of which is held at a steady temperature by a hot fluid flowing through it. The clearance between the two ducts is maintained by blowing cooling air through apertures in the outer duct which can then escape through the clearance between the two ducts. The size of the clearance therefore controls the cooling airflow through the outer duct which regulates the size of the clearance by controlling the thermal expansion of the outer duct.

Equivalent-expenditure functions and expenditure- dependent equivalence scales

Abstract This paper presents and investigates a new class of equivalent-expenditure functions that is a generalization of the one that corresponds to exact (independent-of-base) equivalence scales. It provides less restrictive household demands, especially for children’s goods, and has associated equivalence scales that may depend on expenditure. We show that, under certain conditions, equivalent-expenditure functions and the associated expenditure-dependent equivalence scales can be uniquely estimated from demand data. We estimate them using Canadian data and find that the resulting scales are both plausible and expenditure dependent. The estimated equivalence scales for households with children decline significantly as expenditure increases.

Language as both human capital and ethnicity

In this study, we estimate earnings differentials for knowledge of thirteen minority languages in Canadas three largest urban areas. We find that conditional on knowledge of a majority language, knowledge of a minority language is associated with lower earnings. However, the negative differential diminishes for those languages with large local populations. This suggests a positive human capital effect which is for the most part swamped by a negative factor. We argue that this factor is a reflection of ethnicity operating either through ethnolinguistic labor market enclaves or labor market discrimination against minorities.

Glass Ceilings or Glass Doors? Wage Disparity within and between Firms

We investigate whether immigrant and minority workers’ poor access to high-wage jobs—that is, glass ceilings—is attributable to poor access to jobs in high-wage firms, a phenomenon we call glass doors. Our analysis uses linked employer–employee data to measure mean and quantile-wage differentials of immigrants and ethnic minorities, both within and across firms. We find that glass ceilings exist for some immigrant groups, and that they are driven in large measure by glass doors. For some immigrant groups, the sorting of these workers across firms accounts for as much as half of the economy-wide wage disparity they face. This article has the supplement materials online.

Taking prices seriously in the measurement of inequality

In the measurement of inequality, adjustments for differences across households in their demographic composition and in the price regimes they face are usually very simple. Often, nominal income is adjusted with an income-independent price deflator and a price-independent equivalence scale. I show that using more flexible income-dependent price deflators and price-dependent equivalence scales affects the level of, and trend in, measured consumption inequality in Canada over 1978-1996. Whereas standard methods show a large increase in inequality over the eraly 1980s and a decrease over the mid 1990s, more flexible methods show a smaller increase over the early 1980s and no decrease over the mid 1990s.

Aboriginal Income Disparity in Canada

Dans cet article, nous analysons les écarts de rémunérations et de revenus entre les Autochtones et les autres Canadiens nés au pays, de 1995 à 2005. Nous observons que, chez les personnes ayant des caractéristiques identiques (l’âge et le degré de scolarité, par exemple), la rémunération et les revenus des Autochtones sont largement inférieurs à ceux des autres travailleurs canadiens. Nous estimons que cet écart est de 10 % à 20 % chez les femmes, et de 20 % à 50 % chez les hommes. Parmi les Autochtones, ce sont les Indiens inscrits qui ont les revenus les plus bas, suivis des personnes qui se déclarent d’identité autochtone ; les personnes d’ascendance autochtone, mais ne faisant pas partie des deux groupes précédents, sont celles qui ont les meilleurs revenus.

Consumption Poverty in Canada, 1969 to 1998

In this paper, I estimate the poverty rate as the proportion of individuals who have consumption - rather than income - lower than an absolute poverty line. The absolute poverty line used is based on the expenditure necessary to achieve a minimum level of material well-being. It does not change over time with changing social values as do relative poverty lines. Consumption is used because consumption levels are chosen by households with some knowledge of future and past incomes, and may thus be a better indicator of material well-being than income. Here, consumption is adjusted for differences in the prices faced by, and demographic characteristics of, different households.The story told by consumption poverty measures is mixed. As with income poverty measures, the consumption poverty rate declined over the 1970s and 1980s - all boats rose in the rising tide. However, the 1990s tell a different story. The consumption poverty rate increased by more than half between 1992 and 1998. Outcomes for children were even worse. The rate of consumption poverty among children more than doubled between 1992 and 1998.