IDEAS home Printed from
   My bibliography  Save this paper

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


  • Steven G. Prus


At each stage of the life course, people experience different economic situations. Retired people, for example, draw the majority of their incomes from the pension system rather than the labour market. Using Survey of Consumer Finances cross-sectional data from 1973 to 1996, this paper examines Canadian trends in income inequality over the middle and later stages of the life course of a synthetic cohort born between 1922 and 1926. Three hypotheses regarding changes in the level of income inequality during later life are tested: income is 1) distributed more equally; 2) distributed about the same; or 3) distributed less equally, in the retirement years than in the working years. Using Gini coefficients, the findings show that income inequality decreases within a cohort as it grows old; that is, the Canadian retirement income system smooths out (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, 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. Any reform toward privatization of the retirement income system in Canada will jeopardize the ability of the state to reshape income inequalities in later life.

Suggested Citation

  • Steven G. Prus, 1999. "Income Inequality as a Canadian Cohort Ages: An Analysis of the Later Life Course," Social and Economic Dimensions of an Aging Population Research Papers 10, McMaster University.
  • Handle: RePEc:mcm:sedapp:10

    Download full text from publisher

    File URL:
    Download Restriction: no

    References listed on IDEAS

    1. Lars Osberg, 1998. "Economic Insecurity," Discussion Papers 0088, University of New South Wales, Social Policy Research Centre.
    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. Jenkins, S., 1988. "The Measurement Of Economic Inequality," Papers 170, Australian National University - Department of Economics.
    4. 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.
    Full references (including those not matched with items on IDEAS)


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

    Cited by:

    1. Lynn McDonald & A. Leslie Robb, 2003. "The Economic Legacy of Divorced and Separated Women in Old Age," Social and Economic Dimensions of an Aging Population Research Papers 104, McMaster University.

    More about this item


    income inequality; cohort; public pension;

    JEL classification:

    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination


    Access and download statistics


    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:mcm:sedapp:10. 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: (). General contact details of provider: .

    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.