IDEAS home Printed from https://ideas.repec.org/a/cpp/issued/v42y2016i2p132-151.html
   My bibliography  Save this article

Wealth Distribution and the Canadian Middle Class: Historical Evidence and Policy Implications

Author

Listed:
  • Livio Di Matteo

Abstract

Historical and modern wealth microdata examines the long-term evolution in Canadian wealth inequality. Wealth inequality has increased in recent decades but is more equally distributed than a century ago. The chief beneficiaries of a more "equitable" wealth distribution were the "middle" shares, as represented by the next 40 percent of the distribution after the top 10 percent. Despite the onset of more redistributive government in the twentieth century, the wealth share of the bottom 50 percent has remained low over time and represents a more pressing set of policy and social issues than the middle class.

Suggested Citation

  • Livio Di Matteo, 2016. "Wealth Distribution and the Canadian Middle Class: Historical Evidence and Policy Implications," Canadian Public Policy, University of Toronto Press, vol. 42(2), pages 132-151, June.
  • Handle: RePEc:cpp:issued:v:42:y:2016:i:2:p:132-151
    DOI: 10.3138/cpp.2015-041
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.3138/cpp.2015-041
    Download Restriction: access restricted to subscribers

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Roine, Jesper & Waldenström, Daniel, 2014. "Long-Run Trends in the Distribution of Income and Wealth," Working Paper Series 1021, Research Institute of Industrial Economics.
    2. William G. Gale & John Karl Scholz, 1994. "Intergenerational Transfers and the Accumulation of Wealth," Journal of Economic Perspectives, American Economic Association, vol. 8(4), pages 145-160, Fall.
    3. Valerie Oppenheimer, 1974. "The life-cycle squeeze: The interaction of men’s occupational and family life cycles," Demography, Springer;Population Association of America (PAA), vol. 11(2), pages 227-245, May.
    4. David W. Galenson & Clayne L. Pope, 1989. "Economic and Geographic Mobility on the Farming Frontier: Evidence from Appanoose County, Iowa 1850-1870," NBER Historical Working Papers 0004, National Bureau of Economic Research, Inc.
    5. Modigliani, Franco, 1988. "The Role of Intergenerational Transfers and Life Cycle Saving in the Accumulation of Wealth," Journal of Economic Perspectives, American Economic Association, vol. 2(2), pages 15-40, Spring.
    6. McGranahan, Leslie, 2009. "The widow's offering: Inheritance, family structure, and the charitable gifts of women," Explorations in Economic History, Elsevier, vol. 46(3), pages 356-367, July.
    7. Kotlikoff, Laurence J & Summers, Lawrence H, 1981. "The Role of Intergenerational Transfers in Aggregate Capital Accumulation," Journal of Political Economy, University of Chicago Press, vol. 89(4), pages 706-732, August.
    8. Osberg, Lars & Siddiq, Fazley, 1988. "The Inequality of Wealth in Britain's North American Colonies: The Importance of the Relatively Poor," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 34(2), pages 143-163, June.
    9. Inwood, K. & Ingram, S., 2000. "Property Ownership by Married Women in Victorian Ontario," Working Papers 2000-8, University of Guelph, Department of Economics and Finance.
    10. Ferrie, Joseph P., 1994. "The Wealth Accumulation of Antebellum European Immigrants to the U.S., 1840–60," The Journal of Economic History, Cambridge University Press, vol. 54(1), pages 1-33, March.
    11. Martin David & Paul Menchik, 1988. "Changes in cohort wealth over a generation," Demography, Springer;Population Association of America (PAA), vol. 25(3), pages 317-335, August.
    12. Hardle, Wolfgang & Linton, Oliver, 1986. "Applied nonparametric methods," Handbook of Econometrics, in: R. F. Engle & D. McFadden (ed.), Handbook of Econometrics, edition 1, volume 4, chapter 38, pages 2295-2339, Elsevier.
    13. Kristina Lilja & Dan Bäcklund, 2013. "To navigate the family economy over a lifetime: life-cycle squeezes in pre-industrial Swedish towns," European Review of Economic History, Oxford University Press, vol. 17(2), pages 171-189, May.
    14. Steckel, Richard H. & Moehling, Carolyn M., 2001. "Rising Inequality: Trends In The Distribution Of Wealth In Industrializing New England," The Journal of Economic History, Cambridge University Press, vol. 61(1), pages 160-183, March.
    15. Oecd, 2015. "What Lies Behind Gender Inequality in Education?," PISA in Focus 49, OECD Publishing.
    16. Kevin Milligan, 2005. "Life‐cycle asset accumulation and allocation in Canada," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 38(3), pages 1057-1106, August.
    17. Bernheim, B Douglas, 1991. "How Strong Are Bequest Motives? Evidence Based on Estimates of the Demand for Life Insurance and Annuities," Journal of Political Economy, University of Chicago Press, vol. 99(5), pages 899-927, October.
    18. Shorrocks, A F, 1975. "The Age-Wealth Relationship: A Cross-Section and Cohort Analysis," The Review of Economics and Statistics, MIT Press, vol. 57(2), pages 155-163, May.
    19. Atack, Jeremy & Bateman, Fred, 1981. "Egalitarianism, Inequality, and Age: The Rural North in 1860," The Journal of Economic History, Cambridge University Press, vol. 41(1), pages 85-93, March.
    20. James B. Davies & Susanna Sandström & Anthony Shorrocks & Edward N. Wolff, 2011. "The Level and Distribution of Global Household Wealth," Economic Journal, Royal Economic Society, vol. 121(551), pages 223-254, March.
    21. Davies, James B, 1981. "Uncertain Lifetime, Consumption, and Dissaving in Retirement," Journal of Political Economy, University of Chicago Press, vol. 89(3), pages 561-577, June.
    22. Thomas Piketty & Emmanuel Saez, 2003. "Income Inequality in the United States, 1913–1998," The Quarterly Journal of Economics, Oxford University Press, vol. 118(1), pages 1-41.
    23. Lee, Chulhee, 2001. "Life-Cycle Saving in the United States, 1900-90," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 47(2), pages 165-179, June.
    24. Laitner, John & Ohlsson, Henry, 2001. "Bequest motives: a comparison of Sweden and the United States," Journal of Public Economics, Elsevier, vol. 79(1), pages 205-236, January.
    25. Galenson, David W., 1991. "Economic Opportunity on the urban frontier: nativity, work, and wealth in early chicago," The Journal of Economic History, Cambridge University Press, vol. 51(3), pages 581-603, September.
    26. Torben M Andersen, 2015. "Human Capital, Inequality and Growth," European Economy - Discussion Papers 2015 - 007, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    27. Aman Ullah, 1988. "Non-parametric Estimation of Econometric Functionals," Canadian Journal of Economics, Canadian Economics Association, vol. 21(3), pages 625-658, August.
    28. Main, Jackson Turner, 1983. "Standards of Living and the Life Cycle in Colonial Connecticut," The Journal of Economic History, Cambridge University Press, vol. 43(1), pages 159-165, March.
    29. Hurd, Michael D, 1987. "Savings of the Elderly and Desired Bequests," American Economic Review, American Economic Association, vol. 77(3), pages 298-312, June.
    30. Gratton, Brian, 1996. "The Poverty of Impoverishment Theory: The Economic Well-Being of the Elderly, 1890–1950," The Journal of Economic History, Cambridge University Press, vol. 56(1), pages 39-61, March.
    31. Kotlikoff, Laurence J, 1988. "Intergenerational Transfers and Savings," Journal of Economic Perspectives, American Economic Association, vol. 2(2), pages 41-58, Spring.
    32. Steckel, Richard H, 1990. "Poverty and Prosperity: A Longitudinal Study of Wealth Accumulation, 1850-1860," The Review of Economics and Statistics, MIT Press, vol. 72(2), pages 275-285, May.
    33. Herscovici, Steven, 1998. "Migration and Economic Mobility: Wealth Accumulation and Occupational Change Among Antebellum Migrants and Persisters," The Journal of Economic History, Cambridge University Press, vol. 58(4), pages 927-956, December.
    34. Adonis Yatchew, 1998. "Nonparametric Regression Techniques in Economics," Journal of Economic Literature, American Economic Association, vol. 36(2), pages 669-721, June.
    35. Walker, Thomas R., 2000. "Economic Opportunity on the Urban Frontier: Wealth and Nativity in Early San Francisco," Explorations in Economic History, Elsevier, vol. 37(3), pages 258-277, July.
    36. Gokhale, Jagadeesh & Kotlikoff, Laurence J. & Sefton, James & Weale, Martin, 2001. "Simulating the transmission of wealth inequality via bequests," Journal of Public Economics, Elsevier, vol. 79(1), pages 93-128, January.
    37. David, M.H. & Menchik, P.L., 1988. "Changes In Cohort Wealth Over A Generation," Working papers 362, Wisconsin Madison - Social Systems.
    38. Atkinson, Anthony B., 2015. "Inequality: what can be done?," LSE Research Online Documents on Economics 101810, London School of Economics and Political Science, LSE Library.
    39. Kessler, Denis & Masson, Andre, 1989. "Bequest and Wealth Accumulation: Are Some Pieces of the Puzzle Missing?," Journal of Economic Perspectives, American Economic Association, vol. 3(3), pages 141-152, Summer.
    40. Karen E. Dynan & Jonathan Skinner & Stephen P. Zeldes, 2002. "The Importance of Bequests and Life-Cycle Saving in Capital Accumulation: A New Answer," American Economic Review, American Economic Association, vol. 92(2), pages 274-278, May.
    41. Edward N. Wolff, 2010. "Recent Trends in Household Wealth in the United States-- Rising Debt and the Middle-Class Squeeze--An Update to 2007," Economics Working Paper Archive wp_589, Levy Economics Institute.
    42. Avery, Robert B & Elliehausen, Gregory E & Kennickell, Arthur B, 1988. "Measuring Wealth with Survey Data: An Evaluation of the 1983 Survey of Consumer Finances," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 34(4), pages 339-369, December.
    43. Galenson, David W. & Pope, Clayne L., 1989. "Economic and Geographic Mobility on the Farming Frontier: Evidence from Appanoose County, Iowa, 1850–1870," The Journal of Economic History, Cambridge University Press, vol. 49(3), pages 635-655, September.
    44. Arrondel, L. & Perelman, S. & Pestieau, P., 1994. "The effect of bequest motives on the composition and distribution of assests in France. In T. Tachibanski (ed.)," LIDAM Reprints CORE 1117, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    45. Menchik, Paul L & David, Martin, 1983. "Income Distribution, Lifetime Savings, and Bequests," American Economic Review, American Economic Association, vol. 73(4), pages 672-690, September.
    46. Angus Deaton, 2005. "Franco Modigliani and the life-cycle theory of consumption," BNL Quarterly Review, Banca Nazionale del Lavoro, vol. 58(233-234), pages 91-107.
    47. Emmanuel Saez & Michael R. Veall, 2005. "The Evolution of High Incomes in Northern America: Lessons from Canadian Evidence," American Economic Review, American Economic Association, vol. 95(3), pages 831-849, June.
    48. Davies, J. B. & Shorrocks, A. F., 1989. "Optimal grouping of income and wealth data," Journal of Econometrics, Elsevier, vol. 42(1), pages 97-108, September.
    49. Combs, Mary Beth, 2005. "A Measure of Legal Independence†: The 1870 Married Women's Property Act and the Portfolio Allocations of British Wives," The Journal of Economic History, Cambridge University Press, vol. 65(4), pages 1028-1057, December.
    50. Hurd, Michael D, 1990. "Research on the Elderly: Economic Status, Retirement, and Consumption and Saving," Journal of Economic Literature, American Economic Association, vol. 28(2), pages 565-637, June.
    51. Abul F. M. Shamsuddin & Don J. DeVoretz, 1998. "Wealth Accumulation Of Canadian And Foreign‐Born Households In Canada," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 44(4), pages 515-533, December.
    52. Jousten, Alain, 2001. "Life-cycle modeling of bequests and their impact on annuity valuation," Journal of Public Economics, Elsevier, vol. 79(1), pages 149-177, January.
    53. M.C. Urquhart, 1988. "Canadian Economic Growth 1870-1980," Working Paper 734, Economics Department, Queen's University.
    54. Di Matteo, Livio, 1998. "Wealth Accumulation and the Life-Cycle in Economic History: Implications of Alternative Approaches to Data," Explorations in Economic History, Elsevier, vol. 35(3), pages 296-324, July.
    55. A. L. Robb & L. Magee & J. B. Burbidge, 1992. "Kernel Smoothed Consumption-Age Quantiles," Canadian Journal of Economics, Canadian Economics Association, vol. 25(3), pages 669-680, August.
    56. Lewis, Frank D, 1983. "Fertility and Savings in the United States: 1830-1900," Journal of Political Economy, University of Chicago Press, vol. 91(5), pages 825-840, October.
    57. Matteo, Livio Di, 1997. "The Determinants of the Wealth and Asset Holding in Nineteenth-Century Canada: Evidence from Microdata," The Journal of Economic History, Cambridge University Press, vol. 57(4), pages 907-934, December.
    58. Di Matteo, Livio, 2013. "Women, wealth and economic change: An assessment of the impact of women's property law in Wentworth County, Ontario, 1872–1927," Explorations in Economic History, Elsevier, vol. 50(2), pages 285-307.
    59. Gregson, Mary Eschelbach, 1996. "Wealth Accumulation and Distribution in the Midwest in the Late Nineteenth Century," Explorations in Economic History, Elsevier, vol. 33(4), pages 524-538, October.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Vincent Geloso & Peter Lindert, 2020. "Relative costs of living, for richer and poorer, 1688–1914," Cliometrica, Springer;Cliometric Society (Association Francaise de Cliométrie), vol. 14(3), pages 417-442, September.
    2. James B. Davies & Nicole M. Fortin & Thomas Lemieux, 2017. "Wealth inequality: Theory, measurement and decomposition," Canadian Journal of Economics, Canadian Economics Association, vol. 50(5), pages 1224-1261, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Livio Di Matteo, 2008. "Wealth accumulation motives: evidence from the probate records of Ontario, 1892 and 1902," Cliometrica, Journal of Historical Economics and Econometric History, Association Française de Cliométrie (AFC), vol. 2(2), pages 143-171, July.
    2. Di Matteo, Livio, 2013. "Women, wealth and economic change: An assessment of the impact of women's property law in Wentworth County, Ontario, 1872–1927," Explorations in Economic History, Elsevier, vol. 50(2), pages 285-307.
    3. Di Matteo, Livio, 1998. "Wealth Accumulation and the Life-Cycle in Economic History: Implications of Alternative Approaches to Data," Explorations in Economic History, Elsevier, vol. 35(3), pages 296-324, July.
    4. Arrondel, Luc & Masson, Andre, 2006. "Altruism, exchange or indirect reciprocity: what do the data on family transfers show?," Handbook on the Economics of Giving, Reciprocity and Altruism, in: S. Kolm & Jean Mercier Ythier (ed.),Handbook of the Economics of Giving, Altruism and Reciprocity, edition 1, volume 1, chapter 14, pages 971-1053, Elsevier.
    5. Mauro Baranzini, 2005. "Modigliani's life-cycle theory of savings fifty years later," Banca Nazionale del Lavoro Quarterly Review, Banca Nazionale del Lavoro, vol. 58(233-234), pages 109-172.
    6. Mauro Baranzini, 2005. "Modigliani's life-cycle theory of savings fifty years later," BNL Quarterly Review, Banca Nazionale del Lavoro, vol. 58(233-234), pages 109-172.
    7. Wojciech Kopczuk & Joseph P. Lupton, 2007. "To Leave or Not to Leave: The Distribution of Bequest Motives," Review of Economic Studies, Oxford University Press, vol. 74(1), pages 207-235.
    8. Marta Melguizo Garde, 2007. "La motivación de las transmisiones lucrativas entre generaciones de una familia: modelos teóricos y evidencia empírica," Hacienda Pública Española / Review of Public Economics, IEF, vol. 181(2), pages 81-118, June.
    9. William G. Gale & John Karl Scholz, 1994. "Intergenerational Transfers and the Accumulation of Wealth," Journal of Economic Perspectives, American Economic Association, vol. 8(4), pages 145-160, Fall.
    10. Charles Yuji Horioka, 2002. "Are the Japanese Selfish, Altruistic or Dynastic?," The Japanese Economic Review, Japanese Economic Association, vol. 53(1), pages 26-54, March.
    11. Di Matteo, Livio & Herbert Emery, J. C., 2002. "Wealth and the demand for life insurance: evidence from Ontario, 1892," Explorations in Economic History, Elsevier, vol. 39(4), pages 446-469, October.
    12. John Ameriks & Andrew Caplin & Steven Laufer & Stijn Van Nieuwerburgh, 2007. "The Joy of Giving or Assisted Living? Using Strategic Surveys to Separate Bequest and Precautionary Motives," NBER Working Papers 13105, National Bureau of Economic Research, Inc.
    13. Schunk, Daniel, 2007. "What determines the saving behavior of German households? : an examination of saving motives and saving decisions," Papers 07-10, Sonderforschungsbreich 504.
    14. Siha Lee & Kegon T. K. Tan, 2019. "Bequest Motives and the Social Security Notch," Working Papers 2019-061, Human Capital and Economic Opportunity Working Group.
    15. Hubbard, R. Glenn & Skinner, Jonathan & Zeldes, Stephen P., 1994. "The importance of precautionary motives in explaining individual and aggregate saving," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 40(1), pages 59-125, June.
    16. Niimi, Yoko & Horioka, Charles Yuji, 2016. "The Impact of Intergenerational Transfers on Household Wealth Inequality in Japan and the United States," AGI Working Paper Series 2016-20, Asian Growth Research Institute.
    17. Päivi Kankaanranta, 2006. "Consumption Over the Life Cycle: A Selected Literature Review," Discussion Papers 7, Aboa Centre for Economics.
    18. Shinichi Nishiyama, 2000. "Measuring Time Preference and Parental Altruism: Technical Paper 2000-7," Working Papers 13333, Congressional Budget Office.
    19. repec:oup:ecpoli:v:20:y:2005:i:43:p:505-565 is not listed on IDEAS
    20. Stewart, James I., 2012. "Migration to U.S. frontier cities and job opportunity, 1860–1880," Explorations in Economic History, Elsevier, vol. 49(4), pages 528-542.
    21. Peter Mooslechner & Martin Schürz & Pirmin Fessler, 2008. "How Inheritances Relate to Wealth Distribution? Theoretical Reasoning and Empirical Evidence on the Basis of LWS Data," LWS Working papers 6, LIS Cross-National Data Center in Luxembourg.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cpp:issued:v:42:y:2016:i:2:p:132-151. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Prof. Werner Antweiler). General contact details of provider: https://www.utpjournals.press/loi/cpp .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.