Nicole Fortin

Professor (on leave)
CIFAR, SIIWB program, Senior Fellow
IZA, Research Fellow

I am a Full Professor in the Vancouver School of Economics at UBC in Vancouver, BC where I teach courses in labour economics and empirical economics, at the graduate and undergraduate levels. I moved to UBC in 1999 after teaching for ten years at the Université de Montréal, in my hometown.

I have three main streams of research. A first stream revolves around wage inequality and its links to labour market institutions and public policies, including higher education policies. A second stream focuses on the economic progress of women, gender equality policies, and gender issues in education. A third stream includes contributions to decomposition methods, namely the widely used DFL reweighting decomposition methodology and the newer RIF (recentered influence function) regression methodology, both published in Econometrica.

Please click on paper titles for abstracts and full text downloads.

RECENT PRESENTATIONS

Use earnings data from the Canadian Longitudinal Worker Files, supplemented by hourly wage data from the Labour Force Surveys, this paper applies the approach used in the analysis of earnings inequality in top incomes, as well as reweighing techniques, to the analysis of the gender pay gap. The paper finds that recent increases in top incomes lead to substantial "swimming upstream" effects, therefore accounting for the slower progress in the gender pay gap and the growing unexplained (by traditional factors) share of the gap.

[go to CEA presentation]

[go to EALE presentation]

[go to SCSE presentation]

RECENT MANUSCRIPTS

 This paper reviews the basic principles of inequality measurement, underlining the advantages and shortcomings of alternative measures from a theoretical standpoint and in the context of the study of the distribution of wealth. Adopting the two most popular measures, the Gini index and the P-shares, the paper documents wealth inequality in Canada using the 1999, 2005, and 2012 Survey of Financial Security (SFS). It carries out several decompositions with covariates, featuring DFL-type reweighting methods, and Gini and P-shares RIF-regressions. The latter parallel decompositions deepen our understanding of how changes in socio-demographic characteristics, including the compensating role of family formation and human capital, impact wealth inequality.

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 Using the PISA surveys (2000-2012), this paper explores the relationship between math test scores and everyday computer gaming by gender and for high income and middle income countries. We use two identification strategies in the spirit of an ideal experiment that would reduce computer gaming through limited internet access or through schools alternative demands. We find that everyday computer gaming has positive effects for boys, but negative effects for girls arising mostly in collaborative games suggesting a role for social effects. Computer gaming is becoming the new “swimming upstream” factor in the quest to close the gender gap in math.

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This paper argues that changes in the returns to occupational tasks have contributed to changes in the wage distribution over the last three decades. Using Current Population Survey (CPS) data, we first show that the 1990s polarization of wages is explained by changes in wage setting between and within occupations, which are well captured by tasks measures linked to technological change and offshorability. Using a decomposition based on Firpo, Fortin, and Lemieux (2009), we find that technological change and de-unionization played a central role in the 1980s and 1990s, while offshorability became an important factor from the 1990s onwards.

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PUBLICATIONS

 This paper explores the consequences of the under-representation of women in top jobs for the overall gender pay gap. Using administrative annual earnings data from Canada, Sweden, and the United Kingdom, it applies the approach used in the analysis of earnings inequality in top incomes, as well as reweighing techniques, to the analysis of the gender pay gap. The analysis is supplemented by classic O-B decompositions of hourly wages using data from the Canadian and U.K. Labour Force Surveys. The paper finds that recent increases in top incomes led to substantial "swimming upstream" effects, therefore accounting for differential progress in the gender pay gap across time periods and a growing share of the gap unexplained by traditional factors.

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We use new information on the location of study of immigrants available in the 2006 Canadian Census to estimate returns to Canadian and foreign human capital. We find that controlling for the source of human capital (Canadian versus foreign) helps account for a large share of the immigrant/native-born wage gap. We show that commonly-used imputation procedures (e.g. Friedberg, 2000) that assign domestic and foreign education based on age at arrival tend to overestimate the returns to foreign education and underestimate the returns to foreign work experience. We also find that the immigrant/native-born wage gap is highly heterogeneous across places of birth even after including location of study fixed effects, although this inclusion markedly reduces the negative country of origin effects for countries like China, Pakistan, and India. Finally, we note substantial heterogeneity in the portability of human capital across fields of study.

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This paper seeks to connect changes in the structure of wages at the occupation level to measures of the task content of jobs. We first present a simple model where skills are used to produce tasks, and changes in task prices are the underlying source of change in occupational wages. Using Current Population Survey (CPS) wage data and task measures from the O*NET, we document large changes in both the within and between dimensions of occupational wages over time, and find that these changes are well explained by changes in task prices likely induced by technological change and offshoring.

[go to paper]

Are Canadian children who are young relative to their class-mates more likely to exhibit inattentive/hyperactive behaviours? If so, are there gender differences in the extent to which this is true? Do the effects on inattentive/hyperactive behaviours of starting school relatively young persist into adolescence? Using data from the Statistics Canada National Longitudinal Survey of Children and Youth, we apply two research strategies to address these questions. A ‘difference in difference’ design compares children who are the same age in months, but live in provinces and/or time periods with different school start dates. A ‘regression discontinuity’ design compares scores for children living in the same province who were born just born and just after the relevant school entry cut-off. Both approaches find that being young in class causes greater inattentive/hyperactive behaviour for children, especially if the child was more inattentive/hyperactive prior to school entry. Moreover, this result alaso holds in sibling fixed effect models (i.e., a child who is young in class is more inattentive/hyperactive than his sibling who is not). Though we do not find gender differences in the effects of being young in class for a given level of inattentive/hyperactive behaviour at age 2/3, boys are more affected by being young in class because they are more likely to be inattentive/hyperactive at school entry; and, these effects persist into early adolescence.

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Using three decades of data from the “Monitoring the Future” cross-sectional surveys, this paper shows that, from the 1980s to the 2000s, the mode of girls’ high school GPA distribution has shifted from “B” to “A”, essentially “leaving boys behind” as the mode of boys’ GPA distribution stayed at “B”. In a reweighted OB decomposition of achievement at each GPA level, we find that gender differences in post-secondary expectations, controlling for school ability, and as early as 8th grade are the most important factor accounting for this trend. Increases in the growing proportion of girls who aim for a post-graduate degree are sufficient to account for the increase over time in the proportion of girls earning “A’s”. The larger relative share of boys obtaining “C” and C+” can be accounted for by a higher frequency of school misbehavior and a higher proportion of boys aiming for a two-year college degree.

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After a century of remarkable growth, female labor force participation (FLP) has leveled-off in the late 1990s, despite continuous improvement in fundamental economic variables, such as educational attainment. Using data from the 1977-2006 General Social Surveys (GSS), this paper studies the impact of changing gender role attitudes on the evolution of FLP in the United States. The analysis accounts for non-linear time-period, life-cycle, and cohort effects, as well as a host of background variables. It uses a double prong instrumental variable strategy appealing to extraneous attitudes found in the GSS, and to an exogenous shock to attitudes, namely the AIDS scare, which may have acted as a counter-current to the “Pill Revolution”, using repeated cross-sectional data from the 1988-2006 National Health Interview Surveys (NHIS) in the context of a variant of two-sample two-stage least squares (TS2LS). Gender role attitudes, whose progression stalled in the mid-1990s when the AIDS crisis peaked, are found to explain at least a third of the recent leveling-off in FLP that is, as much as all the usual variables combined.

[go to paper
[go to JSTOR]

In this paper we use data from the Canadian Labour Force Survey (1997 to 2012) to understand why the level and dispersion of wages have moved differently across provinces. In terms of levels, the dominant trend is the much faster increase in wages in Newfoundland, Saskatchewan, and Alberta than in other provinces since the late 1990s. We find that the growth in the extractive resources sector (mining, oil and gas) accounts for most of these differences. We also find that less-educated workers have benefited more from these changes, which explains why inequality declined in Alberta and Saskatchewan relative to the rest of the country. Inequality also declined in the bottom half (the gap between the 50th and 10th wage percentiles) in most provinces, resulting in a polarization of wages documented in other countries. We show that changes in minimum wages appear to be the main reason why wages at the very bottom (e.g. the 10th percentile) grew more than in the middle of the distribution over the last 10-15 years. Most provinces have increased their minimum wages substantially since about 2005, and changes in (province-level) wages at the bottom of the wage distribution are closely connected to changes in provincial minimum wages.

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We provide the first solid evidence that Chinese superstitious beliefs can have significant effects on house prices in a North American market with a large immigrant population. Using real estate data on close to 117,000 house sales, we find that houses with address number ending in four are sold at a 2.2% discount and those ending in eight are sold at a 2.5% premium, in comparison to houses with other addresses. These price effects are found either in neighborhoods with a higher than average percentage of Chinese residents, consistent with cultural preferences, or in repeated transactions, consistent with speculative behavior.

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Considerable concern has recently been expressed about growing income inequality. Much of the discussion, though, has been in general terms and focused on the U.S. experience. To understand whether and how Canada ought to respond to this development, we need to be clear on the facts. This paper documents Canadian patterns in income inequality and investigates the top 1% of earners – the group receiving much attention. We summarize what is known about the causes of growing income inequality, including the role of gender wage differences. Finally we outline policy options for reducing -- or slowing the growth of -- inequality.

[go to CLSRN version]

This chapter provides a comprehensive overview of decomposition methods that have been developed since the seminal work of Oaxaca and Blinder in the early 1970s. These methods are used to decompose the difference in a distributional statistic between two groups, or its change over time, into various explanatory factors. While the original work of Oaxaca and Blinder considered the case of the mean, our main focus is on other distributional statistics besides the mean such as quantiles, the Gini coefficient or the variance. We discuss the assumptions required for identifying the different elements of the decomposition, well as various estimation methods proposed in the literature. We also illustrate how these methods work in practice by discussing existing applications and working through a set of empirical examples throughout the paper.

[go to paper - NBER version]

  We propose a new regression method to estimate the impact of explanatory variables on quantiles of the unconditional (marginal) distribution of an outcome variable. The proposed method consists of running a regression of the (recentered) influence function (RIF) of the unconditional quantile on the explanatory variables. The influence function is a widely used tool in robust estimation that can easily be computed for each quantile of interest. We show how standard partial effects, as well as policy effects, can be estimated using our regression approach. We propose three different regression estimators based on a standard OLS regression (RIF-OLS), a logit regression (RIF-Logit), and a non-parametric logit regression (RIF-OLS). We also discuss how our approach can be generalized to other distributional statistics besides quantiles. link to paper not available.

This paper exploits differences across the U.S. states in the evolution of the returns to college from 1979 to 2002, and of nine-years lagged college enrollment rates, tuition levels and state appropriations per-college-age person, to show that there is tight link between higher education policies, past enrollment rates, and recent changes in the college wage premium. The analysis shows however that this relationship is much weaker in states with either high private enrollments, high levels of mobility among college graduates, or high levels of inter-state trade. The within state estimates of the own-cohort supply effects also shed some light on the important issue of whether the U.S. labor market can = be characterized as one national market or whether there exists state-speciÞc labor markets.

[go to paper]

This paper exploits differences across the U.S. states in the evolution of the returns to college from 1979 to 2002, and of nine-years lagged college enrollment rates, tuition levels and state appropriations per-college-age person, to show that there is tight link between higher education policies, past enrollment rates, and recent changes in the college wage premium. The analysis shows however that this relationship is much weaker in states with either high private enrollments, high levels of mobility among college graduates, or high levels of inter-state trade. The within-state estimates of the own-cohort supply effects also shed some light on the important issue of whether the U.S. labor market can be characterized as one national market or whether there exists state-speciÞc labor markets.

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We investigate the effect of pro-active comparable worth legislation--covering both the public and private sectors--on wages, the gender wage gap and the gender composition of employment. The focus is the pay equity initiative of the Canadian province of Ontario in the early 1990s. We document substantial lapses in the compliance and problems with the implementation of the law among smaller firms where the majority of men and women work. This evidence provides important lessons of the obstacles to extending pay equity to the private sector of a decentralized labor market. When we focus on those sectors of the labor market where compliance was relatively strict, our results suggest that any positive effects on the wages of women in female jobs were very modest. Our most consistently estimated effects of the law on wages are negative: slower wage growth for women in male jobs and for men in female jobs.

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We document the evolution of occupational gender segregation and its implications for women’s labour market outcomes over the twentieth century. The first half of the century saw a considerable decline in vertical segregation as women moved out of domestic and manufacturing work into clerical work. This created a substantial amount of horizontal segregation that persists to this day. To study the effects of occupational segregation on the gender gap, we introduce a decomposition technique that divides the gap into between occupation and within-occupation components. Since the 1990s the component attributable to within-occupation wage differentials has become predominant.

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The relationship between occupational gender composition and wages is the basis of pay equity/comparable worth legislation. A number of previous studies have examined this relationship in U.S. data, identifying some of the determinants of low wages in "female jobs", as well as important limitations of public policy in this area. There is little evidence, however, from other jurisdictions. This omission is particularly disturbing in the case of Canada, which now has some of the most extensive pay equity legislation in the world. In this paper, we provide a comprehensive picture, circa the late 1980's, of occupational gender segregation in Canada and its consequences for wages. The sample period precedes many provincial pay equity initiatives and thus the results should provide a baseline for the evaluation of this legislation. Our analysis reveals sensitivity of the estimated penalty to "female work" to both specification and estimation strategy. Our preferred estimates indicate that the wage penalties for women in female jobs in Canada are generally smaller than penalties in the United States. Of particular note, while there is some heterogeneity across worker groups, on average the link between female wages and gender composition is small and generally not statistically significant.

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Occupational Task Indexes from the following paper

This paper seeks to connect changes in the structure of wages at the occupation level to measures of the task content of jobs. We first present a simple model where skills are used to produce tasks, and changes in task prices are the underlying source of change in occupational wages. Using Current Population Survey (CPS) wage data and task measures from the O*NET, we document large changes in both the within and between dimension of occupational wages over time, and find that these changes are well explained by changes in task prices likely induced by technological change and offshoring.

[go to paper]

Download Indexes

Data and programs from Fortin, Lemieux, and Firpo (2011)

This chapter provides a comprehensive overview of decomposition methods that have been developed since the seminal work of Oaxaca and Blinder in the early 1970s. These methods are used to decompose the difference in a distributional statistic between two groups, or its change over time, into various explanatory factors. While the original work of Oaxaca and Blinder considered the case of the mean, our main focus is on other distributional statistics besides the mean such as quantiles, the Gini coefficient or the variance. We discuss the assumptions required for identifying the different elements of the decomposition, well as various estimation methods proposed in the literature. We also illustrate how these methods work in practice by discussing existing applications and working through a set of empirical examples throughout the paper.

[go to paper - NBER version]

Download DM_genderexample.zip
Download DM_maleineqexample.zip

RIF regression ado files from Firpo, Fortin and Lemieux (2009)

  We propose a new regression method to estimate the impact of explanatory variables on quantiles of the unconditional (marginal) distribution of an outcome variable. The proposed method consists of running a regression of the (recentered) influence function (RIF) of the unconditional quantile on the explanatory variables. The influence function is a widely used tool in robust estimation that can easily be computed for each quantile of interest. We show how standard partial effects, as well as policy effects, can be estimated using our regression approach. We propose three different regression estimators based on a standard OLS regression (RIF-OLS), a logit regression (RIF-Logit), and a non-parametric logit regression (RIF-OLS). We also discuss how our approach can be generalized to other distributional statistics besides quantiles. link to paper not available.

Download rifreg.zip
Instructions: simply unzip the files into the directory c:adoplusr or equivalent, and use STATA help command for the syntax of the procedure.  The following program shows how to produce a graph of the estimated unconditional partial effect of union coverage: graph_rifreg_coef1.do using the mock dataset usmen0305_two. Simply download and save in an appropriate directory before running.

Download replication files