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Why Have Poorer Neighbourhoods Stagnated Economically, While the Richer have Flourished? Neighbourhood Income Inequality in Canadian Cities

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  • Chen, W. H.
  • Myles, John
  • Picot, Garnett

Abstract

Higher income neighbourhoods in Canada’s eight largest cities flourished economically during the past quarter century, while lower income communities stagnated. This paper identifies some of the underlying processes that led to this outcome. Increasing family income inequality drove much of the rise in neighbourhood inequality. Increased spatial economic segregation, the increasing tendency of “like to live nearby like†, also played a role. In the end, the differential economic outcomes between richer and poorer neighbourhoods originated in the labour market, or in family formation patterns. Changes in investment, pension income, or government transfers played a very minor role. But it was not unemployment that differentiated the richer from poorer neighbourhoods. Rather, it was the type of job found, particularly the annual earnings generated. The end result has been little improvement in economic resources in poor neighbourhoods during a period of substantial economic growth, and a rise in neighbourhood income inequality.

Suggested Citation

  • Chen, W. H. & Myles, John & Picot, Garnett, 2011. "Why Have Poorer Neighbourhoods Stagnated Economically, While the Richer have Flourished? Neighbourhood Income Inequality in Canadian Cities," CLSSRN working papers clsrn_admin-2011-21, Vancouver School of Economics, revised 21 Aug 2011.
    • Handle: RePEc:ubc:clssrn:clsrn_admin-2011-21
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    File URL: http://www.clsrn.econ.ubc.ca/workingpapers/CLSRN%20Working%20Paper%20no.%2082%20-%20Chen,%20Myles%20and%20Picot.pdf
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    14. Nancy A. Ross & Lisa N. Oliver & Paul J. Villeneuve, 2013. "The Contribution of Neighbourhood Material and Social Deprivation to Survival: A 22-Year Follow-up of More than 500,000 Canadians," IJERPH, MDPI, vol. 10(4), pages 1-14, April.
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    16. Lazar Ilic & M Sawada, 2021. "The temporal evolution of income polarization in Canada’s largest CMAs," PLOS ONE, Public Library of Science, vol. 16(6), pages 1-27, June.
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    19. Vanesa Jorda & Jose M. Alonso, 2020. "What works to mitigate and reduce relative (and absolute) inequality?: A systematic review," WIDER Working Paper Series wp-2020-152, World Institute for Development Economic Research (UNU-WIDER).

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    More about this item

    Keywords

    Inequality; Neighbourhood; Poverty;
    All these keywords.

    JEL classification:

    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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