Study: Tracking recent changes in income mobility in Canada, 1978 to 2014
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Have children in Canada had better or worse economic opportunities than their parents? One way to determine this is by examining whether youth achieved a family income in adulthood that matched or exceeded that of their parents. For the first time in Canada, this has been done in a new study which examines rates of absolute income mobility across different birth cohorts.
The study is based on data from the Intergenerational Income Database, an administrative database that links children to parents using information on family structure at the time the children were 16 to 19 years of age. It also contains information on the income of children and their parents, from 1978 to 2014.
Of those who reached 30 years of age between 2000 and 2014, 59% to 67% (depending on the year being looked at) had a family income that matched or exceeded that of their parents when they were the same age. Variations within this range appear to correspond with changes in general economic conditions in Canada over that period.
The study also highlights changes in economic opportunities by income levels. Children with parents in the lowest income percentiles were most likely to have a higher family income at 30 years of age than their parents did at the same age, while the opposite was true for children whose parents were in the highest income percentiles. For children whose parents were between the 20th to 80th percentiles, rates of income mobility were higher among the 1975, 1980 and 1984 birth cohorts than for the group born in 1970.
Among those people born between 1963 and 1974, the percentages who had a higher family income at 40 years of age than their parents did when they were the same age ranged from 61% to 67% from 2003 to 2014 (depending on the year being looked at).
Recent estimates published in the United States suggest that, at 30 years of age, rates of absolute income mobility for the 1970 birth cohort were somewhat lower in Canada than in the United States. However, subsequent trends in the two countries appear to be quite different. The U.S. estimates for the 1980 birth cohort show a substantial decline in absolute income mobility compared to the 1970 birth cohort, while corresponding Canadian rates appear more stable.
The research article, "Doing as Well as One's Parents? Tracking Recent Changes in Absolute Income Mobility in Canada," which is part of Economic Insights (11-626-X), is now available.
For more information, or to enquire about the concepts, methods or data quality of this release, contact us (toll-free 1-800-263-1136; 514-283-8300; STATCAN.infostats-infostats.STATCAN@canada.ca).
To enquire about the concepts, methods or data quality of this release, contact Yuri Ostrovsky (613-614-5911; firstname.lastname@example.org), Social Analysis and Modelling Division.