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Changes in parental work time and earnings

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By Sébastien LaRochelle-Côté, Philippe Gougeon and Dominique Pinard

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Between 1980 and 2005, parental work time increased by substantial margins, especially for families located at the bottom and in the middle of the earnings distribution. From 1980 to 2005, the proportion of families with two parents working full time and full year more than doubled, from 15% to 32%.

A good deal of the increase in parental work time occurred in the 1980s and was induced by the rising labour market participation of mothers.

Over the same period, median parental earnings rose by 20% overall among two-parent families. However, earnings rose less rapidly for families at the bottom of the earnings distribution and increased faster for families located at the top.

About 45% of the overall increase in parental earnings was due to the increased work time of parents, with each family type (low, middle and high earnings) contributing to the increase.

The other part of the overall increase (55%) was due to rising returns to work for a given amount of parental work time. For the most part, these gains were concentrated among families with high earnings.

Changes in the demographic characteristics of families with high earnings do not explain the higher returns on their work time. Rather, changes in the structure of wages likely explain this phenomenon.

Between 1980 and 2005, single mothers also increased their work time by substantial amounts and saw a proportional increase in their earnings—including single mothers with low earnings. Conversely, single fathers with low earnings were the only ones to increase their work time, but experienced the worst declines in earnings.