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Household Incomes in Canada and the United States: Who is Better Off?

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  • Simon Lapointe

Abstract

It is commonly noted that Americans are on average richer than Canadians. For example, in 2016, GDP per capita was US $47,294 in Canada (PPP-adjusted) compared to US $57,798 in the United States. However, this comparison of average incomes does not necessarily imply that all or even most Canadians are worse off than Americans. This report shows that Canadian households in the bottom 56 per cent of the income distribution are in fact better off than American households at the same point of the income distribution. This finding is driven by the lower income inequality in Canada, and illustrates how the usual comparison of incomes between Canada and the United States using GDP per capita or average household income hides a critical part of the story.

Suggested Citation

  • Simon Lapointe, 2019. "Household Incomes in Canada and the United States: Who is Better Off?," CSLS Research Reports 2019-01, Centre for the Study of Living Standards.
    • Handle: RePEc:sls:resrep:1901
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    File URL: http://www.csls.ca/reports/csls2019-01.pdf
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    References listed on IDEAS

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    1. repec:bla:revinw:v:39:y:1993:i:3:p:229-56 is not listed on IDEAS
    2. Wolfson, Michael & Murphy, Brian B, 1998. "New Views on Inequality Trends in Canada and the United States," Analytical Studies Branch Research Paper Series 1998124e, Statistics Canada, Analytical Studies Branch.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Canada; United States; Household Income; Well-Being;
    All these keywords.

    JEL classification:

    • O51 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - U.S.; Canada
    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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