Data and definitions

Box 1  Definitions

Low-income was assessed using the Market Basket Measure (MBM) of low-income. The MBM estimates the cost of a specific basket of goods and services (included in the basket are food, shelter, clothing and footwear, as well as transportation and an aggregate set of other goods and services, including personal care, household needs, furniture, recreation and other special expenses) which is then compared to the disposable family income available to purchase those goods. The MBM disposable family income is the sum remaining after deducting from total family money income: total income taxes paid; the personal portion of payroll taxes; other mandatory payroll deductions such as contributions to employer-sponsored pension plans, supplementary health plans and union dues; child support and alimony payments made to another family; out-of-pocket spending on child care; and non-insured but medically-prescribed health-related expenses such as dental and vision care, prescription drugs and aids for persons with disabilities. Families that do not have sufficient income to purchase the basket are identified as being in low-income (Human Resources and Social Development Canada, 2006).

Family refers to economic family units as defined by Statistics Canada. An "economic family" is a group of individuals related by blood, marriage or adoption, who shared a common dwelling unit at the time of Statistics Canada's survey. An "economic family unit" includes unattached individuals as separate units. Note that the economic family unit is used by Statistics Canada (with the Low-Income Cut-Offs) and Human Resources and Social Development Canada (with the MBM) to derive statistics on low-income.

Working poor Canadians are individuals aged 18 to 64, who are not full-time students, who worked for pay at least one hour in the reference year and who live in an economic family unit with income below the low-income threshold.

Using Statistics Canada's census definition, an urban area is defined as an area with a population of at least 1,000 and a population density of at least 400 per square kilometre. All areas outside urban areas are classified as rural areas.

In 2001, one-third of "census rural" Canadians lived in the countryside within the commuting zones of a larger urban centre. In other words, they could access jobs in towns and cities with a population of 10,000 or more. Interestingly, "census rural" households within larger urban centres had, on average, higher incomes than the "census urban" households within the larger urban centres (du Plessis, 2002, Appendix Table F1). du Plessis finds the contrary result with areas outside larger urban centres (i.e. rural and small town areas) – the "census rural" population had a lower income than the "census urban" population. In this study, we adopt the "census rural" definition to distinguish between urban and rural as it is the rural definition used for the MBM threshold of low-income. As it turns out, the "census rural" population on the Labour Force Survey (which forms the sampling frame for the Survey of Labour and Income Dynamics) refers only to the "census rural" population outside larger urban centres using the variable called "Size of Area of Residence" (see Definitions Box on page 2 in Marshall and Bollman, 1999.) Thus, our analysis refers to the "census rural" population outside the commuting zone of larger urban centres and consequently excludes the "census rural" population within the commuting zones of larger urban centres.

Box 2  Data source – Survey of Labour and Income Dynamics

Statistics Canada's Survey of Labour and Income Dynamics (SLID) is the official source of estimates on low-income in Canada. The SLID also provides detailed information on the labour market activity of individuals and families.

The SLID is based on the Labour Force Survey sample design and excludes residents of Indian Reserves and residents of the Territories.

In this study, cross-sectional analyses used the 2003 SLID data while longitudinal analyses were conducted using data from the 1999-2004 SLID panel. Year 2003 includes data from two overlapping panels (for a total of about 75,200 observations) while the 1999-2003 data are made of only one panel (a total of about 43,700 observations; 25,600 when limiting the sample to those who responded to the survey all years).

When doing analysis using SLID data, it is possible to get samples that are representative of the whole Canadian population with the use of weights. For cross-sectional analysis, the weighted sample is representative of the Canadian population in 2003 while for longitudinal analysis it is representative of the Canadian population in the first year of the panel, i.e. 1999.

Box 3  Labour market concepts

The classification of the type of occupation of workers (e.g. sales and services, primary industry, etc.) comes from Grouping # 3 for Standard Occupation Classification code at end of the reference year based on 1991 coding structure. This corresponds to the grouping also known as SOC (12). The variable that was used to identify the occupation of the worker in the SLID is s91g3e6.

A medium size business is a business employing 20 to 100 employees.

Salaried workers are workers who never had a period of self-employment during the reference year. Self-employed workers are defined as workers who had at least one period of self-employment during the reference year (note that some of those individuals may also have had some salaried work during the reference year).

To be unattached means not living with any individual related by blood, marriage or adoption.

To be low-paid means earning less than $10 per hour (applies to salaried workers only).