Canada

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Overview of Trends of Economic Inequality in Canada

 

Has the dispersion of earnings been increasing in recent decades?Yes, top decile of earnings has been rising relative to the median since early 1950s.
Has overall inequality increased in recent years?Yes, Gini coefficient is around 3 percentage points higher than in 1989 but most of the increase took place in the 1990s.
Have there been periods when overall inequality fell for a sustained period?Incomplete evidence.
Has poverty been falling or rising in recent decades?Poverty fell in the 1980’s and then rose.
Has there been a U-pattern for top income shares over time?Yes, top gross income shares fell from 1938 until the mid-1980s and then began to rise.
Has the distribution of wealth followed the same pattern as income?No evidence.
Additional noteworthy features

Sources and References

Overall inequality: Gini coefficient of equivalised (from 2010 square root scale) after-tax family unit income from website of Statistics Canada, Table 202-0709; Gini coefficient for equivalised gross family income for 1965 to 1983 from Wolfson (1986, Table 3); Gini coefficient for gross family income restricted to non-farm families for 1959-1971 from Love (1979, Table A.3).

Top income shares: Share of top 1 per cent in total gross income from WTID, based on work of Saez and Veall (2007) and Veall (2010).

Poverty: Percentage of individuals in households with equivalised after-tax annual income below 50 per cent of the median from website of Statistics Canada, Table 202-0802.

Individual earnings: Series 1 from Atkinson (2008, Appendix C, Table C.4); Series 2 from OECD iLibrary, Employment and Labour Market Statistics, Gross earnings decile ratios.

Wealth: no suitable data were found.

References:

  • Atkinson, A B, 2008, The changing distribution of earnings in OECD countries, Oxford University Press, Oxford.
  • Love, R, 1979, Income distribution and inequality in Canada, Ministry of Supply and Services, Ottawa.
  • Saez, E and Veall, M R, 2007, “The evolution of high incomes in Canada: 1920- 2000” in A B Atkinson and T Piketty, editors, Top incomes over the twentieth century, Oxford University Press, Oxford.
  • Veall, M R, 2010, “Top income shares in Canada: Updates and extensions”, working paper, McMaster University.
  • Wolfson, M C, 1986, “Stasis Amid Change – Income Inequality in Canada 1965-1983”, Review of Income and Wealth, vol 32: 337-69.