Essays on economic vulnerability and inequality

Overview

Abstract (English)

In the first chapter, I develop and estimate a model of life-cycle labour supply that incorporates the role of divorce. To do so, I set a collective model of household decision-making in an intertemporal context. The reduced-form literature has produced contradictory results on the effect of divorce and divorce risk on women’s labour decisions. My model provides a unifying framework within which to view these findings. It also contributes to the structural literature, which has mostly studied how divorce alters bargaining power in marriage, and ignored women’s insurance response to the risk of dissolution. I find that divorce risk decreases the lifetime expected income of married women, increasing their labour in all periods. However, this effect is mitigated over time, as women stay in and learn about their marriage. Among women who experience divorce, it exacerbates pre-existing differences across marriages. In the second chapter, we investigate the role played by education in the intergenerational mobility of Canadian children. We use the Longitudinal and International Study of Adults (LISA), a panel of integrated survey and administrative data covering 1982 to 2013. We estimate that the education level of children accounts for one third to one half of the correlation between their income and their parents’. Furthermore, our estimates show comparable experiences of intergenerational mobility across individuals with differing levels of education. Both results suggest untapped opportunities in the education system to improve people’s mobility. In the third chapter, we exploit the Longitudinal Administrative Databank (LAD) to study the evolution of wealth inequality in Canada, from 1982 to 2011. Until now, research has relied largely on the Survey of Financial Security, which has sporadic coverage, under-coverage at the top of the wealth distribution, and a small sample size. We use the income capitalization method to take advantage of the higher-frequency data and large sample size provided by the LAD. Consistent with existing work, we find that the top 10% share was fairly constant over the period considered. However, our results differ in that we observe that the top 1% share grew moderately but steadily between 1995 and 2007.

Abstract (French)

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