The Evolution of Hourly Compensation in Canada between 1980 and 2010*

We find that wage inequality (as measured by the coefficient of variation) among full-time workers has almost doubled between 1980 and 2010. The rapid growth among the top 0.1% is the main driver of that increase. Changes in the characteristics of the workforce (such as age, experience and education) explain less than 25% of the rise in wage inequality; the rest is explained by increasing within-group inequality. However, changes in worker characteristics explain most of the increase in average hourly compensation over those three decades.