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The Evolution of Wealth Inequality in Canada, 1984-1999


  • Drolet, Marie
  • Morissette, Rene
  • Zhang, Xuelin


Using data from the Assets and Debts Survey of 1984 and the Survey of Financial Security of 1999, we document the evolution of wealth inequality in Canada between 1984 and 1999. Our main findings are as follows: 1) wealth inequality has increased between 1984 and 1999, 2) the growth in wealth inequality has been associated with substantial declines in real average and median wealth for young couples with children and recent immigrants, 3) real median wealth and real average wealth rose much more among family units whose major income recipient is a university graduate than among other family units, 4) real median and average wealth fell among family units whose major income recipient is aged 25-34 and increased among those whose major income recipient is aged 55 and over, 5) the aging of the Canadian population over the 1984-1999 period has tended to reduce wealth inequality, 6) diverging changes in permanent income do not explain a substantial portion of the growing gap between low-wealth and high-wealth family units. Factors that may have contributed to rising wealth inequality - which cannot be quantified with existing data sets - include differences in the growth of inheritances, inter vivos transfers, rates of return on savings and number of years worked full-time. In particular, rates of return on savings may have increased more for wealthy family units than for their poorer counterparts as a result of the booming stock market during the 1990s.

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  • Drolet, Marie & Morissette, Rene & Zhang, Xuelin, 2002. "The Evolution of Wealth Inequality in Canada, 1984-1999," Analytical Studies Branch Research Paper Series 2002187e, Statistics Canada, Analytical Studies Branch.
  • Handle: RePEc:stc:stcp3e:2002187e

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    References listed on IDEAS

    1. Francine D. Blau & John W. Graham, 1990. "Black-White Differences in Wealth and Asset Composition," The Quarterly Journal of Economics, Oxford University Press, vol. 105(2), pages 321-339.
    2. Davies, J B, 1979. "On the Size Distribution of Wealth in Canada," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 25(3), pages 237-259, September.
    3. Statistics Canada, 1998. "New Views on Inequality Trends in Canada and the United States," Analytical Studies Branch Research Paper Series 1998124e, Statistics Canada, Analytical Studies Branch.
    4. Edward N. Wolff, "undated". "Racial Wealth Disparities Is the Gap Closing?," Economics Public Policy Brief Archive ppb_66, Levy Economics Institute.
    5. Joseph G. Altonji & Ulrich Doraszelski, 2005. "The Role of Permanent Income and Demographics in Black/White Differences in Wealth," Journal of Human Resources, University of Wisconsin Press, vol. 40(1).
    6. Lerman, Robert I & Yitzhaki, Shlomo, 1985. "Income Inequality Effects by Income," The Review of Economics and Statistics, MIT Press, vol. 67(1), pages 151-156, February.
    7. Menchik, Paul L & Jianakoplos, Nancy Ammon, 1997. "Black-White Wealth Inequality: Is Inheritance the Reason?," Economic Inquiry, Western Economic Association International, vol. 35(2), pages 428-442, April.
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    Cited by:

    1. Brozozowski, Matthew & Gervais, Martin & Klein, Paul & Suzuki, Micho, 2009. "Consumption, income, and wealth inequality in Canada," Discussion Paper Series In Economics And Econometrics 0904, Economics Division, School of Social Sciences, University of Southampton.
    2. Andrea Brandolini & Luigi Cannari & Giovanni D’Alessio & Ivan Faiella, 2006. "Household Wealth Distribution in Italy in the 1990s," Chapters,in: International Perspectives on Household Wealth, chapter 7 Edward Elgar Publishing.
    3. Statistics Canada, 2005. "The Decline of the Immigrant Homeownership Advantage: Life-cycle, Declining Fortunes and Changing Housing Careers in Montreal, Toronto and Vancouver, 1981-2001," Analytical Studies Branch Research Paper Series 2005238e, Statistics Canada, Analytical Studies Branch.

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    Household assets; debts and wealth; Household; family and personal income; Income; pensions; spending and wealth; Low income and inequality;

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