Coherent Identifier About this item: 20.500.12592/tfbtk0

A quarter century of economic inequality in Canada, 1981-2006

2008

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Summary

Hence, the increasing size of changes at the very top end is somewhat masked when the average incomes, or the income share, of the top 20% are calculated (as in Table 1 or 2), because the very large changes in the incomes of the top 1% are included in the incomes of the top 5%, and those of the top 5% are included in the top 20%. [...] But although the Gini index in principle varies between zero (perfect equality) and one (perfect inequality), in practice it tends to be most affected by shifts in the middle part of the distribution.9 When there are significant changes in the incomes of those at the extremes of the Canadian distribution, such changes are only weakly reflected in shares of income quintiles, or in the Gini index of [...] An apparent puzzle in all this is to reconcile the rising inequality in annual fam- ily incomes with the picture of a roughly constant distribution of individual hourly wages in Figure 6. The reconciliation is that the hourly wage is only one component in the determination of the Annual Net Income of each person. [...] However, a unique feature of the Canadian experience is the fact that the imple- mentation of the Canada/Quebec Pension Plan and Old Age Security/Guaranteed Income Supplement programme for seniors in the early-1970s and the subsequent maturation of the system produced a strong trend to diminished poverty among the elderly between 1980 and 2005. [...] The purpose of this recap of some of the long list of influences on the inequality of household money income is to emphasize the roles played by a multiplicity of variables, some of which are heavily influenced by the public policies of governments, but some of which depend more on technological, cultural and social shifts (which vary over time and space).

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economics economy poverty recession income distribution interest rate inflation monetary policy canada capitalism economic growth employment family labour retirement unemployment pension bank of canada gdp rate of return economic inequality capital (economics) gini index

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