Study: Family income mobility of Canadian taxfilers, 1982 to 2012
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From the late 1990s to 2012, Canadian taxfilers saw their family incomes increase at a faster rate than during the 1980s and the early 1990s. They also became less likely to move up or down the income distribution ladder.
From the 1980s to the early 1990s, about three-quarters of Canadian taxfilers changed income deciles within a five-year period. However, from 2007 to 2012, the most recent period examined, the proportion of taxfilers who moved to a different income decile in the five-year period fell to two-thirds.
Top family income earners were also less likely to fall to a lower income decile in the 2000s. In 2007, 42.6% of top decile family income earners fell to a lower decile within five years, compared with 48.4% in 1982. Likewise, during the 2000s, taxfilers from lower family income deciles were less likely to move up to a higher decile in five years.
This trend toward less movement on the income ladder occurred against a backdrop of relatively strong growth in family incomes in the late 1990s and 2000s. For example, in the 1980s and early 1990s, the growth rate of family incomes was 2.1%. Over the late 1990s and 2000s, after-tax family income grew by an average of 8.5% during each five-year period.
Note to readers
The study, "The evolution of income mobility in Canada: Evidence from the Longitudinal Administrative Databank, 1982 to 2012," uses longitudinal data to track whether taxfilers changed positions on the after-tax family income ladder over a number of five-year periods.
The study is based on data from the Longitudinal Administrative Databank, which is a 20% sample of all Canadian taxfilers, linked over time. The first five-year period examined was from 1982 to 1987 and the last was from 2007 to 2012.
To be included in the study, a taxfiler must have been in the sample during both the first and last years of the five-year period.
The research paper, "The evolution of income mobility in Canada: Evidence from the Longitudinal Administrative Databank, 1982 to 2012," which is part of the Income Research Paper Series (75F0002M), is now available from the Browse by key resource module of our website, under Publications.
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