IDEAS home Printed from https://ideas.repec.org/a/wly/fistud/v45y2024i2p119-130.html
   My bibliography  Save this article

Canadian inequality over the last 40 years: common and contrary variations on universal themes

Author

Listed:
  • Kelly Foley
  • David A. Green
  • W. Craig Riddell

Abstract

The Gini coefficient for disposable income for Canada in 2019 was approximately the same level it was at in 1995. Underlying this flat recent long‐term pattern is an increase in the level of market earnings inequality in the 1980s and 1990s that Canada shared with other countries followed by a continuing period of flatness in that measure as well. This trend interacted with changes in policy that have, at times, offset earnings inequality trends and at other times exacerbated them. In this paper, we describe these trends and the combination of market and policy forces that drove them. We conclude that explanations rooted in ongoing technology or globalisation forces are less relevant than explanations based on deeper structural changes in the labour market. Those changes affecting earnings inequality were ultimately fully offset by changes in the tax and transfer system as well as labour market policies such as the minimum wage.

Suggested Citation

  • Kelly Foley & David A. Green & W. Craig Riddell, 2024. "Canadian inequality over the last 40 years: common and contrary variations on universal themes," Fiscal Studies, John Wiley & Sons, vol. 45(2), pages 119-130, June.
    • Handle: RePEc:wly:fistud:v:45:y:2024:i:2:p:119-130
    DOI: 10.1111/1475-5890.12374
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/1475-5890.12374
    Download Restriction: no
    File URL: https://libkey.io/10.1111/1475-5890.12374?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. David Card & Thomas Lemieux & W. Craig Riddell, 2020. "Unions and wage inequality: The roles of gender, skill and public sector employment," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 53(1), pages 140-173, February.
    2. David H. Autor & David Dorn & Gordon H. Hanson, 2013. "The China Syndrome: Local Labor Market Effects of Import Competition in the United States," American Economic Review, American Economic Association, vol. 103(6), pages 2121-2168, October.
    3. Michael R. Veall, 2012. "Top income shares in Canada: recent trends and policy implications," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 45(4), pages 1247-1272, November.
    4. Joseph Marchand, 2015. "The distributional impacts of an energy boom in Western Canada," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 48(2), pages 714-735, May.
    5. Marc Frenette & David A. Green & Kevin Milligan, 2007. "The tale of the tails: Canadian income inequality in the 1980s and 1990s," Canadian Journal of Economics, Canadian Economics Association, vol. 40(3), pages 734-764, August.
    6. James B. Davies & Nicole M. Fortin & Thomas Lemieux, 2017. "Wealth inequality: Theory, measurement and decomposition," Canadian Journal of Economics, Canadian Economics Association, vol. 50(5), pages 1224-1261, December.
    7. Casey Warman & Christopher Worswick, 2015. "Technological change, occupational tasks and declining immigrant outcomes: Implications for earnings and income inequality in Canada," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 48(2), pages 736-772, May.
    8. David Card & Thomas Lemieux & W. Craig Riddell, 2004. "Unions and Wage Inequality," Journal of Labor Research, Transaction Publishers, vol. 25(4), pages 519-562, October.
    9. David A. Green & James Townsend, 2010. "Understanding the wage patterns of Canadian less skilled workers: the role of implicit contracts," Canadian Journal of Economics, Canadian Economics Association, vol. 43(1), pages 373-403, February.
    10. Krishna Pendakur & Ravi Pendakur, 2011. "Aboriginal Income Disparity in Canada," Canadian Public Policy, University of Toronto Press, vol. 37(1), pages 61-83, March.
    11. Paul Beaudry & David A. Green, 2000. "Cohort patterns in Canadian earnings: assessing the role of skill premia in inequality trends," Canadian Journal of Economics, Canadian Economics Association, vol. 33(4), pages 907-936, November.
    12. Nicole M. Fortin & Thomas Lemieux, 2015. "Changes in wage inequality in Canada: An interprovincial perspective," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 48(2), pages 682-713, May.
    13. Michael Baker & Derek Messacar & Mark Stabile, 2023. "Effects of Child Tax Benefits on Poverty and Labor Supply: Evidence from the Canada Child Benefit and Universal Child Care Benefit," Journal of Labor Economics, University of Chicago Press, vol. 41(4), pages 1129-1182.
    14. Marc Frenette & David A. Green & Kevin Milligan, 2009. "Taxes, Transfers, and Canadian Income Inequality," Canadian Public Policy, University of Toronto Press, vol. 35(4), pages 389-411, December.
    15. Emmanuel Saez & Michael R. Veall, 2005. "The Evolution of High Incomes in Northern America: Lessons from Canadian Evidence," American Economic Review, American Economic Association, vol. 95(3), pages 831-849, June.
    16. Ronald Kneebone & Katherine White, 0. "The Rise and Fall of Social-Assistance Use in Canada, 1969-2012," SPP Research Papers, The School of Public Policy, University of Calgary, vol. 7(5), 2014.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Audra Bowlus & Émilien Gouin‐Bonenfant & Huju Liu & Lance Lochner & Youngmin Park, 2022. "Four decades of Canadian earnings inequality and dynamics across workers and firms," Quantitative Economics, Econometric Society, vol. 13(4), pages 1447-1491, November.
    2. Charles M. Beach, 2016. "Changing income inequality: A distributional paradigm for Canada," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 49(4), pages 1229-1292, November.
    3. Bev Dahlby & Kevin Milligan, 2017. "From theory to practice: Canadian economists’ contributions to public finance," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 50(5), pages 1324-1347, December.
    4. 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.
    5. Nicole M. Fortin & Thomas Lemieux, 2015. "Changes in wage inequality in Canada: An interprovincial perspective," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 48(2), pages 682-713, May.
    6. Peter Burton & Shelley Phipps, 2017. "Economic Well-Being of Canadian Children," Canadian Public Policy, University of Toronto Press, vol. 43(4), pages 299-330, December.
    7. Sarah Burkinshaw & Yaz Terajima & Carolyn A. Wilkins, 2022. "Income Inequality in Canada," Discussion Papers 2022-16, Bank of Canada.
    8. Kenyon Bolton & Sébastien Breau, 2012. "Growing Unequal? Changes in the Distribution of Earnings across Canadian Cities," Urban Studies, Urban Studies Journal Limited, vol. 49(6), pages 1377-1396, May.
    9. James B. Davies & Nicole M. Fortin & Thomas Lemieux, 2017. "Wealth inequality: Theory, measurement and decomposition," Canadian Journal of Economics, Canadian Economics Association, vol. 50(5), pages 1224-1261, December.
    10. W. Craig Riddell, 2022. "The labor market in Canada, 2000–2021," IZA World of Labor, Institute of Labor Economics (IZA), pages 432-432, November.
    11. David Albouy & Alex Chernoff & Chandler Lutz & Casey Warman, 2019. "Local Labor Markets in Canada and the United States," Journal of Labor Economics, University of Chicago Press, vol. 37(S2), pages 533-594.
    12. Nicole M. Fortin, 2019. "Increasing earnings inequality and the gender pay gap in Canada: Prospects for convergence," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 52(2), pages 407-440, May.
    13. Sébastien Breau & Dieter F. Kogler & Kenyon C. Bolton, 2014. "On the Relationship between Innovation and Wage Inequality: New Evidence from Canadian Cities," Economic Geography, Clark University, vol. 90(4), pages 351-373, October.
    14. Sébastien Breau & Michael Shin & Nick Burkhart, 2018. "Pulling apart: new perspectives on the spatial dimensions of neighbourhood income disparities in Canadian cities," Journal of Geographical Systems, Springer, vol. 20(1), pages 1-25, January.
    15. Berlingieri, Giuseppe & Blanchenay, Patrick & Criscuolo, Chiara, 2024. "The great divergence(s)," Research Policy, Elsevier, vol. 53(3).
    16. Thomas Lemieux & W. Craig Riddell, 2015. "Top Incomes in Canada: Evidence from the Census," NBER Working Papers 21347, National Bureau of Economic Research, Inc.
    17. W. Craig Riddell, 2018. "The labor market in Canada, 2000–2016," IZA World of Labor, Institute of Labor Economics (IZA), pages 432-432, April.
    18. Benoit Dostie, 2018. "Polarisation du marché du travail, structure industrielle et croissance économique," CIRANO Project Reports 2018rp-02, CIRANO.
    19. Shyon Baumann & Hamnah Majeed, 2020. "Framing economic inequality in the news in Canada and the United States," Palgrave Communications, Palgrave Macmillan, vol. 6(1), pages 1-11, December.
    20. Osberg, Lars, 2013. "Instability implications of increasing inequality: Evidence from North America," Economic Modelling, Elsevier, vol. 35(C), pages 918-930.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:fistud:v:45:y:2024:i:2:p:119-130. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://doi.org/10.1111/(ISSN)1475-5890 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.