Mobility and gender at the top tail of the earnings distribution

Abstract

The increasing share of the top fractile in the earnings distributions of several Anglo- Saxon heritage economies since the 1970s has been dramatic, and well documented. To date, however, little is known about the socio-economic origins and gender composition of the very top tail in the modern era. This paper takes a first step in filling some of the holes in our knowledge. We use a tax-filer data base for Canada for the period 1983-2003 that contains about eighty million observations. We show first that male earners in the top one thousandth of the distribution come very disproportionately from families with incomes in the top decile. In contrast, individuals in the remaining part of the top centile have more dispersed socio-economic origins. Second we show that female participation in the top fractiles has been very low, and that growth in participation has been slow yet definite. In contrast, female earnings in this echelon are almost on par with male earnings. Third, we show that there is an enormous asymmetry between the genders when it comes to spousal earnings: high-earning women have very high-earning spouses, but not vice versa. ‘Secondary males’ have earnings levels almost ten times as high as ‘secondary females’, suggesting that, even at this extremely elevated earnings level there is truth to the adage about who lies ‘behind’ successful individuals. Finally, it is illustrated that the earnings concentration that has characterised the last three decades did not change with the end of the ‘tech boom’ in the year 2000.