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Income Inequality and Redistribution in Canada: 1976 to 2004

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  • Heisz, Andrew

Abstract

Using data from the 1976-to-1997 Survey of Consumer Finances and the 1993-to-2004 Survey of Labour and Income Dynamics, we examine developments in family income inequality, income polarization, relative low income, and income redistribution through the tax-transfer system. We conclude that family after-tax-income inequality was stable across the 1980s, but rose during the 1989-to-2004 period. Growth in family after-tax-income inequality can be due to an increase in family market-income inequality (pre-tax, pre-transfer), or to a reduction in income redistribution through the tax-transfer system. We conclude that the increase in inequality was associated with a rise in family market-income inequality. Redistribution was at least as high in 2004 as it was at earlier cyclical peaks, but it failed to keep up with rapid growth in family market-income inequality in the 1990s. We present income inequality, polarization, and low-income statistics for several well-known measures, and use data preparations identical to those used in the Luxembourg Income Study in order to facilitate international comparisons.

Suggested Citation

  • Heisz, Andrew, 2007. "Income Inequality and Redistribution in Canada: 1976 to 2004," Analytical Studies Branch Research Paper Series 2007298e, Statistics Canada, Analytical Studies Branch.
    • Handle: RePEc:stc:stcp3e:2007298e
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    File URL: https://www150.statcan.gc.ca/n1/en/catalogue/11F0019M2007298
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    Cited by:

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    2. Osberg, Lars, 2013. "Instability implications of increasing inequality: Evidence from North America," Economic Modelling, Elsevier, vol. 35(C), pages 918-930.
    3. Chen Wang & Kees Goudswaard & Koen Caminada, 2012. "Disentangling Income Inequality and the Redistributive Effect of Taxes and Transfers in 20 LIS Countries Over Time Evidence from the LIS Data," LIS Working papers 581, LIS Cross-National Data Center in Luxembourg.
    4. Markus Moos & Pablo Mendez, 2015. "Suburban ways of living and the geography of income: How homeownership, single-family dwellings and automobile use define the metropolitan social space," Urban Studies, Urban Studies Journal Limited, vol. 52(10), pages 1864-1882, August.
    5. Robert Andersen & M. McIvor, 2013. "GINI Country Report: Growing Inequalities and their Impacts in Canada," GINI Country Reports canada, AIAS, Amsterdam Institute for Advanced Labour Studies.
    6. Delorme, Francois & St-Cerny, Suzie, 2014. "La classe moyenne au Québec s’érode-t-elle vraiment : Contour et évolution [Is Quebec's Middle Class Really Shrinking : Overview and Evolution]," MPRA Paper 85051, University Library of Munich, Germany.
    7. Mike Pennock, 2016. "Slower Economic Growth and Subjective Well-Being in the Canadian Context: A Discussion Paper," CSLS Research Reports 2016-09, Centre for the Study of Living Standards.
    8. Bev Dahlby & Kevin Milligan, 2017. "From theory to practice: Canadian economists contributions to public finance," Canadian Journal of Economics, Canadian Economics Association, vol. 50(5), pages 1324-1347, December.
    9. Lars Osberg, 2011. "Why Did Unemployment Disappear from Official Macro-Economic Policy Discourse in Canada?," New Directions for Intelligent Government in Canada: Papers in Honour of Ian Stewart, in: Fred Gorbet & Andrew Sharpe (ed.),New Directions for Intelligent Government in Canada: Papers in Honour of Ian Stewart, pages 127-162, Centre for the Study of Living Standards.
    10. Andrew Sharpe & Christopher Ross, 2011. "Living Standards Domain of the Canadian Index of Wellbeing," CSLS Research Reports 2011-17, Centre for the Study of Living Standards.
    11. Wen-Hao Chen & John Myles & Garnett Picot, 2012. "Why Have Poorer Neighbourhoods Stagnated Economically while the Richer Have Flourished? Neighbourhood Income Inequality in Canadian Cities," Urban Studies, Urban Studies Journal Limited, vol. 49(4), pages 877-896, March.
    12. Edward N. Wolff & Ajit Zacharias & Thomas Masterson & Selçuk Eren & Andrew Sharpe & Elspeth Hazell, 2012. "A Comparison of Inequality and Living Standards in Canada and the United States Using an Expanded Measure of Economic Well-Being," CSLS Research Reports 2012-01, Centre for the Study of Living Standards.
    13. Gordon Anderson, 2018. "Measuring Aspects of Mobility, Polarization and Convergence in the Absence of Cardinality: Indices Based Upon Transitional Typology," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 139(3), pages 887-907, October.
    14. Caminada, Koen & Goudswaard, Kees & Wang, Chen, 2012. "Disentangling income inequality and the redistributive effect of taxes and transfers in 20 LIS countries over time," MPRA Paper 42350, University Library of Munich, Germany.
    15. Delorme, Francois & Godbout, Luc, 2017. "S’instruire, c’est s’enrichir : Le niveau de scolarité joue-t-il un rôle dans l’accès à la classe moyenne au Québec? [To learn is to enrich oneself: Does the level of education play a role in the a," MPRA Paper 85054, University Library of Munich, Germany.
    16. Miles Corak, 2016. "`Inequality is the root of social evil,' or Maybe Not? Two Stories about Inequality and Public Policy," Canadian Public Policy, University of Toronto Press, vol. 42(4), pages 367-414, December.
    17. Markus Moos, 2014. "Generational Dimensions of Neoliberal and Post-Fordist Restructuring: The Changing Characteristics of Young Adults and Growing Income Inequality in Montreal and Vancouver," International Journal of Urban and Regional Research, Wiley Blackwell, vol. 38(6), pages 2078-2102, November.
    18. Bryant, Toba & Raphael, Dennis & Schrecker, Ted & Labonte, Ronald, 2011. "Canada: A land of missed opportunity for addressing the social determinants of health," Health Policy, Elsevier, vol. 101(1), pages 44-58, June.
    19. Andrew Sharpe & Jean-Francois Arsenault & Peter Harrison, 2008. "Why Have Real Wages Lagged Labour Productivity Growth in Canada?," International Productivity Monitor, Centre for the Study of Living Standards, vol. 17, pages 16-27, Fall.

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