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Income Inequality as a Canadian Cohort Ages: An Analysis of the Later Life Course

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  • Steven Prus

Abstract

Survey of Consumer Finances cross-sectional data from 1973 to 1996 are used in this article to examine Canadian trends in income inequality over the middle and later stages of the life course of a synthetic cohort born between 1922 and 1926. Using Gini coefficients, the findings show that income inequality decreases within a cohort as it grows old; that is, the Canadian retirement income system levels the distribution of income in later life. The observed decrease in inequality corresponds with a decrease in income from earnings and an increase in dependency on state benefits. The progressive nature of public pension programs in Canada increases the relative income share and the average income of the poorest seniors. Moreover, cross-national comparisons of income inequality show that Canada exhibits a more equal distribution of income in old age compared to countries with similar old-age welfare systems, such as the United States.

Suggested Citation

  • Steven Prus, 2000. "Income Inequality as a Canadian Cohort Ages: An Analysis of the Later Life Course," LIS Working papers 237, LIS Cross-National Data Center in Luxembourg.
    • Handle: RePEc:lis:liswps:237
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    1. Mustard, Cameron A. & Derksen, Shelley & Berthelot, Jean-marie & Wolfson, Michael & Roos, Leslie L., 1997. "Age-specific education and income gradients in morbidity and mortality in a Canadian province," Social Science & Medicine, Elsevier, vol. 45(3), pages 383-397, August.
    2. Browning, Martin & Deaton, Angus & Irish, Margaret, 1985. "A Profitable Approach to Labor Supply and Commodity Demands over the Life-Cycle," Econometrica, Econometric Society, vol. 53(3), pages 503-543, May.
    3. Michael D. Hurd & John B. Shoven, 1985. "Inflation Vulnerability, Income, and Wealth of the Elderly, 1969- 1979," NBER Chapters, in: Horizontal Equity, Uncertainty, and Economic Well-Being, pages 125-178, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Hanewald, Katja & Jia, Ruo & Liu, Zining, 2021. "Why is inequality higher among the old? Evidence from China," China Economic Review, Elsevier, vol. 66(C).
    2. Thomas L. Hungerford, 2020. "The Course of Income Inequality as a Cohort Ages into Old-Age," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 18(1), pages 71-90, March.
    3. Aboozar Hadavand, 2017. "Anatomy of Income Inequality in the United States: 1979-2013," LIS Working papers 686, LIS Cross-National Data Center in Luxembourg.

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