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Down and Out in North America: Recent Trends in Poverty Rates in the U.S. and Canada

Listed author(s):
  • Maria J. Hanratty
  • Rebecca M. Blank

This paper documents the striking difference in U. S. and Canadian poverty trends from 1970 to 1986. While U.S. poverty has shown no consistent trend since 1970, Canadian poverty decreased by 60%. This paper examines why U. S. and Canadian poverty trends differed during two periods: 1970-1979 and 1979-1986. During the 1970s, we find that the principle reason for declining Canadian poverty rates is higher economic growth. During the 1980s, we find that differences in government transfers are the main cause of relative poverty change in the two countries. Virtually all of the 3.5 difference in U.S. and Canadian poverty changes from 1979 to 1986 can be attributed to differences in the proportion of families moved out of poverty by transfers. This may reflect both the expansion in social assistance levels in Canada, and the retrenchment in assistance levels in the U. S.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 3462.

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Date of creation: Oct 1990
Publication status: published as Quarterly Journal of Economics, Vol. 107, No.1, pp. 233-254, Feb 1992
Handle: RePEc:nbr:nberwo:3462
Note: LS
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  1. Sawhill, Isabel V, 1988. "Poverty in the U.S.: Why Is It So Persistent?," Journal of Economic Literature, American Economic Association, vol. 26(3), pages 1073-1119, September.
  2. Blank, Rebecca M, 1989. "Disaggregating the Effect of the Business Cycle on the Distribution of Income," Economica, London School of Economics and Political Science, vol. 56(222), pages 141-163, May.
  3. John McCallum, 1987. "Unemployment in Canada and the United States," Canadian Journal of Economics, Canadian Economics Association, vol. 20(4), pages 802-822, November.
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