Overview

Abstract (English)

Although the dramatic increase in top incomes has received great attention, much remains to be learned about Canada’s top earners and how the characteristics of this group have evolved over time. Are they mainly employees or owners of businesses? How important to their high incomes are labour earnings relative to income from other sources such as investments? In which industries and occupations do they work, and how have these changed over time? What about other personal and demographic characteristics such as sex, educational attainment and province and city of residence? In this chapter, Thomas Lemieux and Craig Riddell use the Canadian Census master files to look at the evolution of top incomes and the composition of the top 1 percent of income earners between 1981 and 2011. Their main finding is that in Canada, as in the United States, executives and others working in the financial and business services sectors have been driving the growth in top incomes. Unlike in the United States, however, the oil and gas sector has also played an important role in income growth at the top, especially in more recent years, and holders of medical degrees have lost ground. Their results for engineers and computer scientists suggest that technological change is only a modest part of the explanation of what has happened at the very top of the distribution in this country. Overall, the fact that the rise of top incomes has been much greater in certain sectors, such as finance, and among senior executives is more consistent with a pattern of rent (excess earnings relative to market-determined earnings) creation and extraction specific to those sectors than with a competitive market for skills.

Abstract (French)

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