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Taxes, Transfers, and Canadian Income Inequality


  • Marc Frenette
  • David A. Green
  • Kevin Milligan


In this paper, we investigate the relationship between the substantial changes in tax and transfer programs and the movements in after-tax income inequality over the 1980s and 1990s. We show that in the 1980s, tax and transfer programs became more redistributive, offsetting substantial increases in market income inequality. In the 1990s, the tax and transfer system stopped undoing the increases in market income inequality, leading after-tax income inequality to rise. Even so, tax and transfer programs were more redistributive in 2000 than in the 1980s. Much of the changes occurred at the provincial level, with social assistance payments first increasing (in the late 1980s) then decreasing (in the late 1990s) and with surtaxes on high-income earners being first imposed and subsequently removed.

Suggested Citation

  • Marc Frenette & David A. Green & Kevin Milligan, 2009. "Taxes, Transfers, and Canadian Income Inequality," Canadian Public Policy, University of Toronto Press, vol. 35(4), pages 389-411, December.
  • Handle: RePEc:cpp:issued:v:35:y:2009:i:4:p:389-411

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    Blog mentions

    As found by, the blog aggregator for Economics research:
    1. On trends in inequality in Canada, the United Kingdom and Sweden
      by Stephen Gordon in Worthwhile Canadian Initiative on 2011-09-15 05:19:28


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    Cited by:

    1. S├ębastien Breau & Dieter F. Kogler & Kenyon C. Bolton, 2014. "On the Relationship between Innovation and Wage Inequality: New Evidence from Canadian Cities," Economic Geography, Clark University, vol. 90(4), pages 351-373, October.
    2. repec:kap:jgeosy:v:20:y:2018:i:1:d:10.1007_s10109-017-0255-0 is not listed on IDEAS
    3. repec:iza:izawol:journl:y:2018:n:432 is not listed on IDEAS

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