Section 7
Summary
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This paper examines the conceptual and measurement issues relating to voluntary inter-household transfers. Both the Canberra Group (Canberra Group 2001) and the Seventeenth International Conference of Labour Statisticians (International Labour Organization 2004) recommend measuring and including both voluntary and involuntary inter-household transfers in the definition of total income. Statistics Canada now measures only the involuntary component of inter-household transfers as part of total income. However, voluntary inter-household transfers continue to be excluded from the definition of total income. Ideally, the values received from voluntary inter-household transfers should be included in the calculation of total income, or at least a continuation of measuring voluntary inter-household transfers otherwise.
In 2008, the amount of voluntary inter-household transfers received by Canadian households was twice the total value of alimony and child support payments. It is also in the same order of magnitude as major government programs. At the microeconomic level, about 7% of all households benefited from voluntary inter-household transfers; the median recipient household received $2,500.
Different surveys reviewed in this paper showed dissimilar rates of giving/receiving voluntary inter-household transfers, depending on how the question on voluntary inter-household transfer was asked. In 2008, about one in seven households in Survey of Labour and Income Dynamics (SLID) reported sending voluntary inter-household transfers. Meanwhile, Survey of Household Spending (SHS) reported that about 40% of households sent voluntary inter-household transfers in 2008. From 1998 to 2008, 10% more Canadian households sent voluntary inter-household transfers, and the dollar amount in real terms rose 46%. Most voluntary inter-household transfers were sent within Canada. Canadian households sent more money than they received from aboard.
In summary, voluntary inter-household transfers represent a sizeable flow of economic resources between households. Understanding the dynamics of voluntary inter-household transfers would help Canadian researchers provide a more complete picture of the economic well-being of society. It would be helpful conceptually to unify and improve the questions related to voluntary inter-household transfers asked by separate surveys. The questions developed for a longitudinal platform by Statistics Canada for Human Resources and Skills Development Canada can serve as a reference for survey analysts and questionnaire designers interested in the topic.
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