Distribution of income

Earnings make up the lion's share of total income

• Total income consists primarily of earnings, retirement income, investment income and government transfers. The proportion each component contributes to total income depends on a number of factors, including a person's labour force status (employed, unemployed or not in the labour force) and life cycle stage (e.g., a student working part time, a full-time worker at the peak of her career, a retiree). For Canadians generally, earnings make up the highest proportion of total income (78% in 2002), distantly followed by government transfers (11%), retirement income (6%) and investment income (3%).
• In terms of the life cycle, significant differences in the distribution of total income by its components are observed among various age groups and family types. For example, the earnings proportion of total income was only 16% in 2002 for elderly families with a main earner aged 65 and over, compared with 71% for lone-parent families, and 86% for all other families. On the other hand, elderly families reported high proportions of government transfers (41%), retirement income (32%) and investment income (10%). The corresponding distribution for lone-parent families was 21%, 1% and 1%, respectively; and for the remaining families, 7%, 3% and 2%.
• The importance played by earnings in total income also varied through time. For example, in the early 1980s, the earnings of Canadians accounted for 82% of total income, on average. This proportion was down to 77% in the early 1990s, and even lower (75%) in 1996, when government transfers were particularly high.

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