Marc Frenette

Will They Ever Converge? Earnings of Immigrants and Canadian-Born Workers Over the Last Two Decades

Using census data covering the 1980 to 2000 period, we examine what outcomes would be necessary for cohorts of recent immigrants to achieve earnings parity with Canadian-born workers. Our results show that todays recent immigrants would have to experience a drastic rise of their relative age-earnings profile in the near future for their earnings to converge with their Canadian-born counterparts. The reason is simple: the greater relative earnings growth experienced by cohorts of recent immigrants has only partially offset the drastic deterioration in their relative earnings at entry.

The overqualified Canadian graduate: the role of the academic program in the incidence, persistence, and economic returns to overqualification

This study investigates the role of the academic program in the incidence, persistence, and economic returns to overqualification among recent Canadian post-secondary graduates. Master’s graduates are far more prone to overqualification than other graduates. Overqualification rates vary considerably by major field of study at the college and bachelor’s levels, but not at the master’s level. Graduates who are overqualified shortly after entering the workforce are far more likely to remain overqualified in the following years. Weak evidence suggests that co-op graduates are less likely to be overqualified at the bachelor’s and master’s levels, but not at the college level (where co-op programs are more popular). There is a strong, negative earnings effect associated with overqualification at the college and bachelor’s levels, most of which dissipates after accounting for unobserved heterogeneity in a longitudinal framework. There is little or no earnings effect at the master’s and doctoral levels.

Earning differences by major field of study: evidence from three cohorts of recent Canadian graduates

Abstract This paper reports the results of an empirical analysis of earnings differences by major field of study for three cohorts of recent Canadian Bachelor’s level university (‘college’) graduates. Earnings differences are statistically significant and in many cases large; adding various control variables to the relevant regression models typically reduces the discipline effects but leaves significant differences; the patterns are relatively consistent for male and female graduates, for the two points in time (two and five years) following graduation observed, and for the three cohorts of graduates, although there are some notable departures from these norms. A simple measure of the (conditional) variability of earnings indicates that the overall conditional variability in earnings has been relatively constant across cohorts, while some interesting patterns by discipline are observed. Various implications of the findings are discussed.

Access to College and University: Does Distance to School Matter?

It is already known that students from lower-income families are less likely to pursue postsecondary studies. This study contributes to our knowledge of postsecondary access by focusing on the role played by the distance separating high-school students from postsecondary institutions, with particular focus on the choice between college and university attendance. Distance to school may act as a deterrent to attending by virtue of relocation costs, especially if the student is from a lower-income family. The study findings support the notion that increased distance to school is associated with an access gap, even above and beyond the gap that has been linked to family income. Specifically, increased distance to university is associated with lower university attendance, and a larger tendency to attend the local college instead. This relationship is found to be much stronger in lower-income families.

The Tale of the Tails: Canadian Income Inequality in the 1980s and 1990s

We present new evidence on levels and trends in after-tax income inequality in Canada between 1980 and 2000. We argue that existing data sources may miss changes in the tails of the income distribution, and that many of the changes in the income distribution have been in the tails. For this reason, we turn to an alternative source. In particular, we construct data on after-tax and transfer income using Census files augmented with predicted taxes based on information available from administrative tax data. Using these data, we find that Canadian after-tax inequality levels are substantially higher than has been previously recognized, primarily because income levels are lower at the bottom of the distribution than in commonly used survey data. We also find larger long-term increases in after-tax income inequality and far more variability over the economic cycle. This raises interesting questions about the role of the tax and transfer system in mitigating both trends and fluctuations in market income inequality.

Taxes, Transfers, and Canadian Income Inequality

Dans cet article, nous analysons le lien que l’on observe, durant les années 1980 et 1990, entre, d’une part, les changements significatifs apportés aux régimes fiscaux et de transferts, et, d’autre part, les inégalités de revenus après impôt. Nous montrons que, durant les années 1980, les régimes fiscaux et de transferts sont devenus plus redistributifs, compensant ainsi d’importantes hausses d’inégalités de revenus marchands. Pendant les années 1990, les régimes ont cessé de réduire les hausses, et les inégalités de revenus après impôt se sont accrues. Néanmoins, depuis le début des années 2000, les régimes fiscaux et de transferts sont plus redistributifs qu’ils ne l’étaient dans les années 1980. La plupart de ces changements se sont faits au niveau provincial : les prestations d’aide sociale ont d’abord augmenté (durant les années 1980), puis baissé (durant les années 1990), et les salariés à revenu élevé ont subi une majoration d’impôt qui a ensuite été annulée.

Post‐secondary attendance by parental income in the U.S. and Canada: Do financial aid policies explain the differences?

We examine the extent to which tuition and needsbased aid policies explain important differences in the relationship between family income and postsecondary attendance relationships between Canada and the U.S. Using data from recent cohorts, we estimate substantially smaller attendance gaps by parental income in Canada relative to the U.S., even after controlling for family background, cognitive achievement, and localresidence fixed effects. We next document that U.S. public tuition and financial aid policies are actually more generous to lowincome youth than are Canadian policies. Equalizing these policies across Canada and the U.S. would likely lead to a greater difference in incomeattendance gradients.