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

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

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 likeâ€, 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.

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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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Paper provided by Vancouver School of Economics in its series CLSSRN working papers with number clsrn_admin-2011-21.

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Length: 38 pages
Date of creation: 21 Aug 2011
Date of revision: 21 Aug 2011
Handle: RePEc:ubc:clssrn:clsrn_admin-2011-21
Contact details of provider: Web page: http://www.clsrn.econ.ubc.ca/

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  1. Lerman, Robert I & Yitzhaki, Shlomo, 1985. "Income Inequality Effects by Income," The Review of Economics and Statistics, MIT Press, vol. 67(1), pages 151-56, February.
  2. Richard V. Burkhauser & Timothy M. Smeeding & Joachim Merz, 1994. "Relative Inequality and Poverty in Germany and the United States Using Alternative Equivalence Scales," FFB-Discussionpaper 12, Research Institute on Professions (Forschungsinstitut Freie Berufe (FFB)), LEUPHANA University Lüneburg.
  3. Hatfield, M., 1997. "Concentrations of Poverty and Distressed Neighbourhoods in Canada," Papers w-97-1e, Gouvernement du Canada - Human Resources Development.
  4. Murphy, Brian & Wolfson, Michael, 1998. "New Views on Inequality Trends in Canada and the United States," Analytical Studies Branch Research Paper Series 1998124e, Statistics Canada, Analytical Studies Branch.
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