Section 3
Data sources

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Three separate Statistics Canada surveys, Survey of Labour and Income Dynamics (SLID), Survey of Household Spending (SHS) and Survey of Financial Security (SFS), are used to analyse voluntary inter-household transfers. Each survey measures voluntary inter-household transfers differently,¹ so direct comparison is difficult. Yet, each survey supplements the understanding of inter-household transfers by providing an alternate perspective. This section describes the three data sources and their limitations.

SLID measures the changes in Canadian household income and economic well-being over time. SLID has two components: a longitudinal database that follows the same sample over a six-year period and a cross-sectional database, which reflects the reference year. This paper refers to the cross-sectional component. The survey is carried out in the ten provinces annually, with approximately 26,000 to 28,000 households responding each year during 2006 to 2008. The questions on voluntary inter-household transfers were introduced in 2006.²Voluntary inter-household transfers in SLID are defined as the amount of money sent or received by family members not living in the respondent's household, plus regular bill payments paid on the recipient's behalf. From 2006 to 2008, approximately between 791,000 and 850,000 households received voluntary inter-household transfers, and between 1.35 million and 1.65 million households sent voluntary inter-household transfers.³ This enables examination of the socioeconomic data of senders and receivers of voluntary inter-household transfers.

SHS collects data on annual household spending since 1997. It is carried out in all ten provinces each year and in the three territories every second year. It has 13,900 to 17,200 of responding households each year between 1998 and 2007.⁴ The question of voluntary inter-household transfers was not asked independently before 1998.⁵ However, no independent question was asked about the amount of voluntary inter-household transfers received. A voluntary inter-household transfer in SHS is defined as a gift of money sent to any non-household member. From 1998 to 2008, between 3.56 million and 5.36 million households sent voluntary inter-household transfers in a particular year.⁶ Data from SHS make it possible for this paper to examine the trend of voluntary inter-household transfers sent by Canadian households in the last 11 years. They also allow for the examination of the concept, definition and scope of voluntary inter-household transfers, and their comparison with those in SLID and SFS.

SFS collects information on the net worth (wealth) of Canadian families, including assets, debt, employment, income and education. It is an occasional cross-sectional survey, which has been conducted by Statistics Canada since 1955, with the most recent surveys being conducted in 2005.⁷ It is carried out in all ten provinces, with approximately 5,300 economic families responded.⁸ It asked questions on voluntary inter-household transfers, to and from family members only. It allows the examination of the relationship between the amounts of voluntary inter-household transfers sent and received, and the net worth of an economic family. The earlier 1999 SFS is not used in the analysis as it does not have data on the transfer amount send or receive.⁹

Table 1 summarizes the data availability of voluntary inter-household transfers on SLID, SHS and SFS. Among these surveys, SHS has the longest history in measuring voluntary inter-household transfers; SLID has started to measure these transfers more recently; and SFS measures transfers sporadically, depending on when the survey is conducted. Voluntary inter-household transfers are also measured with different units of analysis. Whereas SHS measures payments at the household level, SLID measures them at an individual level,¹⁰ which is then rolled up to household level for comparison;¹¹ and SFS measures them only at the level of the economic family. Domestic and international payments are differentiated in SLID and SHS questionnaires in terms of the origin and destination of voluntary inter-household transfers. In contrast, SFS simply asks for the total amount, regardless of destination.

In short, this paper focuses mainly on SLID data to analyze voluntary inter-household transfers and the effect of transfers on the measurement of income and economic well-being. The trend over time is examined using SHS, supplemented by findings on inter-household transfers in relationship to net worth using SFS. The related sections of all three questionnaires are in Appendixes.

Table 1  Data availability on inter-household transfers in four Statistics Canada surveys

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Notes

1. Voluntary inter-household transfers are measured differently to meet different users need. SHS data is used in the balance of payment of international remittance, while SFS and SLID data are designed to measure financial / economic well-being of Canadian households. In addition, SHS has collected this information since 1997 and similar data by its predecessor FAMEX. Meanwhile, the questions in SFS and SLID were not developed until a few years ago.
2. SLID has had data on alimony and child support payments since 1998.
3. Bootstrap weights developed by Statistics Canada for the Survey of Labour and Income Dynamics (SLID) have been applied for the measurement of variance and standard errors in the 2006, 2007 and 2008 Survey of Labour and Income Dynamics (SLID).
4. The sample size was reduced by 28% in 2008.
5. Before 1998, the question on voluntary inter-household transfer was combined with the question on alimony, separation allowance and child support payments.
6. Bootstrap weights developed by Statistics Canada for the Survey of Household Spending from 2002 to 2008 have been applied for the measurement of variance and standard errors.
7. The information on assets, debts and net worth are based on data collected in the 2005 reference period. The income-related questions are based on data from 2004.
8. Bootstrap weights developed by Statistics Canada for the Survey of Financial Security 2005 have been applied for the measurement of variance and standard errors.
9. The 1999 SFS has questions related to the frequency of inter-household transfers and the relationship of the transfer sender and recipient to the respondent. Details are listed in table 1.
10. In the process, 93 senders and 65 recipients had identical remittance dollar amounts as another household member. It is unclear whether these remittances were reported twice by different household members or same amount remittances were sent by different family members. These identical transfers constitute 3% of the all transfer counts and dollar amounts. These records are retained in this analysis.
11. SLID data can also be rolled up to the census family level and the economic family level. The household level is chosen for direct comparison with SHS, and it matches with the concept of inter-household.