Economic Well-being

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by Cara Williams

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The many determinants of economic well-being
Low income
Financial security
Retirement savings
Home ownership and shelter affordability
Factors contributing to the decline in the gender wage gap

Text begins

The many determinants of economic well-being

Women's economic well-being has many contributing factors, principally current income. However, income alone may not provide a full picture of women's current and future economic well-being.

Other determinants of families' and individuals' economic well-being, such as assets, debts and net worth, must be considered, since they not only provide information about future well-being, they also may provide insight about the financial stability of the household.

Retirement savings are an important indicator of future well-being. Understanding the types of pension plans and measuring contributions allows for a more complete picture of financial preparedness.

Home ownership and shelter affordability are also factors of economic well-being. Home ownership has been traditionally related to economic well-being as it may be related to housing stability; a house can also be liquidated if necessary. Households, or individuals, who spend a large proportion of their income on shelter may face housing insecurity.

Finally, readers should be aware that when income, assets, debts and net worth data are analysed by family type, no assumptions can be made about the distribution of benefits within the household.1


Canadian women earned an average total income2 of $30,100 in 2008, up 13% from $26,300 in 2000.3 That 13% growth surpassed the 7% growth for men over this period, but men continued to have higher average incomes. In 2008, the average total income for men was $47,000.

Chart 1 Average total income of women and men, 1976 to 2008

Incomes by province

Women in Alberta and Ontario had the highest average total income at $34,000 and $31,600, respectively (Table 1). In 2008, the lowest average total incomes were earned by women in Newfoundland and Labrador, $24,000, and in New Brunswick, $24,600.

Table 1 Average total income of women and men, by province, 2008

Women's average total income was lower than men's in every province, but in two provinces the gap was more pronounced. In Alberta, women's total incomes were 55% of men's in 2008 ($34,000 for women and $61,700 for men); in Newfoundland and Labrador, women's incomes were 57% of men's. The gap was smallest in Prince Edward Island and Quebec. In Prince Edward Island, women's incomes were 78% of men's; in Quebec they were 72% of men's.

Income by age group

Women's and men's average incomes vary by age, but each follows the same general pattern. Incomes are lowest for the youngest age group, increase up to age 54, and then decline in the older age groups. Indeed, both women's and men's incomes were highest between the ages of 45 and 54. Average total income for women in this age group was $40,900 in 2008. Women aged 35 to 44 had the next highest average total income at $36,300 (Table 2). Women aged 16 to 19 had the lowest average total income, $7,100.

Table 2 Average total income of women and men, by age group, 2008

In every age group women's average total income was lower than men's, but the gap was smallest in the youngest age range: women between 16 and 19 had incomes of about 90% of men in the same age group. The gap was largest for those aged 55 to 64: women's average total income was 55% of men's—$29,400 compared with $53,400. For the other age groups, the ratio of women's incomes to men's ranged from 75% for those aged 20 to 24 and those age 65 years and older to 61% for those aged 35 to 44.

Income by family type

The income situation for women and men varies depending on their family status. Lone-parent families have the lowest average total incomes. In 2008, female lone-parent families had the lowest average total income of all family types, $42,300, or 70% of the $60,400 earned by male lone-parent families (Table 3). While lone-parent families had the lowest incomes of all family types, their incomes have been rising, and the gap between female and male lone-parent families has been narrowing. For example, from 1998 to 2008, real average total incomes of female lone-parent families grew 51%; those of lone-parent families headed by men grew 13%. In other words, female lone-parent families had incomes worth 53% of those of male lone-parent families in 1998; by 2008 this figure was 70%.

Table 3 Average total income by family type, select years, 1976 to 2008

The groups with highest average total incomes in 2008 were two-parent families with children, at $100,200, and married couples living with other relatives or children aged 18 and older, at $127,800. Married couples with children have seen their real average total income rise each year since 1993, except 2005. Married couples with older children or other relatives living in the household have seen their incomes rise each year since 2003.

Elderly families—those in which the major income earner was 65 years of age or older—also saw growing average total income. In the 10 years from 1998 to 2008, elderly families saw their real total incomes grow from $49,900 to $59,400, an increase of about 16%.

Income of unattached individuals

Unattached individuals can be divided into those younger than 65 years of age, and those 65 and older. In both groups, the average total income of unattached individuals is lower than that of families, and women's average total incomes are lower than men's.

For example, in 2008, unattached women between 16 and 64 had average total incomes equivalent to almost 80% of their male counterparts—$35,000 compared with $42,100 (Table 4). Unattached women 65 and older had an average income about $4,000 lower than women younger than 65, and their incomes were also lower that their male ounterparts—$29,500 compared with $37,500.

Table 4 Average total income of unattached individuals, by sex, select years, 1976 to 2008

Like families, unattached individuals experienced real income growth from 1998 to 2008. Unattached women under 65 saw real income growth of about 23%, compared with about 25% among unattached men in the same age group. For unattached women and men aged 65 and older, total real income grew about 15%.

Sources of income

Wages, salaries and net income from self-employment make up the lion's share of income for most Canadian families and individuals younger than 65. In 2008, about 70% of women's income came from employment; about 17% came from government—including 3.3% from Old Age Security, 4.0% from Canada/Quebec Pension Plan benefits4, and 3.0% from child tax benefits—4.3% came from investment income; and 6.3% came from private retirement income (Table 5).

Table 5 Composition of income for women and men with income, 2008

The composition of women's earnings differed from men's. For example, 70% of women's total income came from employment, compared with 79% of men's. In dollar terms, women received about $21,000 in employment income; men received just over $37,000. Additionally, women received about 17% of their income from government; men received about 8% of their income from government. In dollar terms, in 2008, women received about $1,300 more in transfer payments—an average of about $5,000 per year; men received about $3,700.

Composition of income by family type

Wages and salaries are the largest source of income for non-elderly families. For example, among couples with children, wages and salaries made up about 81% of total income in 2008. Among couples without children in the household, wages and salaries made up 76% of income. Among these family types, government transfers accounted for between 5% and 6% of income (Table 6). Investment income accounted for less than 3% of total income for couples with children younger than 18 in the household.

Table 6 Composition of family income by family structure, 2008

Wages and salaries also made up the largest share of income for lone-parent families: however, there were differences between lone-parent mother and lone-parent father families. In 2008, wages and salaries made up 64% of total income for lone-parent mother families, and about 80% for lone-parent father families. Additionally, lone-parent mothers' share of income from government transfers, 23%, was higher than that of lone-parent fathers, 9%. In 2008, lone-parent mothers received approximately $9,600 from transfer payments; lone-parent fathers received about $5,300.


Earnings are the monies received from paid work in the labour market. Women continue to have lower average annual earnings than men. In 2008, women earned $30,200 annually—or about 65% of the approximately $46,900 that men earned (Table 7). One reason for this is that women are less likely to work full-time than are men.

Table 7 Average annual earnings of women and men, in 2008 constant dollars, by employment status, select years, 1976 to 2008

Among those working full-time, full-year, the ratio of women's earning to men's increased (or the earnings gap decreased) compared with all workers. However, when women and men working full-time, full-year are compared, women's earnings remain at about 71% of men's, a ratio that has fluctuated between 70% and 72% since 1999.

Part of the difference in women's and men's earnings is still related to hours worked: even among full-time workers, women work fewer hours than their male counterparts. For this reason, some research has proposed examining average hourly income as a more accurate measure for comparing women and men (see text box: The gender pay gap revisited).

Earnings and age

The earnings of women increase in the prime income-earning years—up to age 54—then they decline. In 2008, average annual earnings for women aged 16 to 24 who were working full-time, full-year were $23,100. Earnings were highest, $52,800, for women aged 45 to 54 (Table 8). Women working full-year, full-time aged 55 and older had average annual earnings of $42,500.

Table 8 Average annual earnings of women and men employed full-year, full-time, by age group and marital status, 2008

The ratio of women's earnings to men's was highest for those in the 25-to-34 and 45-to-54 age groups. For example, women aged 25 to 34 working full-year, full-time earned about 77% of what men in that age group earned. Women aged 45 to 54 earned about 76% of what men in the same age group earned.

Earnings and marital status

The variation between the earnings of married and single women is generally slight. For example, single never-married women aged 45 to 54 posted average earnings in 2008 of $54,300 (Table 8): married women averaged $52,300 (see also text box: Earnings of women with and without children). However, the same cannot be said for men: the difference between single and married men was greater. For example, single, never-married men aged 45 to 54 who worked full-year, full-time had average annual earnings in 2008 of $50,300; their married counterparts averaged $74,200. Interestingly, when comparing earnings between women and men, earnings are closest for the single never-married men and women.

Earnings and education

Average annual earnings for both women and men rise with their level of education. However, for women, the education premium was greater than for men. For example, women working full-year, full-time with less than a Grade 9 education earned an average $20,800, less than 35% of what women with a university degree earned ($62,800). In comparison, men with less than Grade 9 education earned $40,400, about 44% of the $91,800 earned by men with a university degree (Table 9).

Table 9 Average annual earnings of women and men employed full-year, full-time, by educational attainment, 2008

Men working full-year, full-time earned more than women with the equivalent level of education. At the lowest level of education—less than Grade 9—women's earnings were about 51% of those of men with the same level of education. While the gap narrowed for those with higher levels of education, women working full-year, full-time with a university degree earned about 30% less than equally educated men.

Earnings and occupation

Both women and men working in professional and management occupations earn more than those in other occupations.5 For example, in 2008 earnings for women working full-time were highest for those in medicine and professional health occupations, $73,200. Women in natural sciences earned $64,600; women in management occupations averaged $62,900. By comparison, women working full-time in occupations unique to the primary industries earned an average of $23,400, those in sales and service occupations earned averaged $28,400, and those in clerical occupations averaged $40,000 (Table 10).

Table 10 Average annual earnings of women and men, by occupation, 2008

As with education, so it is with occupation: women working full time earn less than men in the same category. The gap in earnings was greatest between women and men working in primary occupations and in the social sciences/government and religion-related occupations. In these occupations, women earned about one-half what men did. Earnings for women working full time were closest to those of men's for those working in the arts, culture and recreation-related occupations, as well as in teaching and natural science-related occupations. In these occupations, women earned 83% to 85% as much as men in the same occupation group.

The difference in women's and men's earnings is found in both the professional and non-professional occupational groupings. For example, women in medicine and health-related occupations earned about 57% as much as men in those occupations; women in business and finance occupations earned about 59% as much as their male counterparts. In the non-professional occupations such as sales and service, women earned about 57% of men working in these occupations.

Text box 1

Earnings of women with and without children

Raising children entails not only child care responsibilities, but also monetary costs. One cost is the 'family gap,' also called the 'child penalty' or 'motherhood earnings gap.' It measures how far the earnings of women with children fall below those of women without children, other factors being equal.

Age–earnings profiles of Canadian mothers and women without children show that women without children earned more than women with children. For example, at age 30, average hourly earnings of women with children were $15.20, compared with $18.10 for women without children (measured in 2004 dollars). On average, the earnings of women with children were 12% lower than those of women without children. And the earnings gap increased with the number of children: with one child, the gap was 9%; with two children, it was 12%; and with three or more children, 20%.

The earnings disadvantage of mothers differed based on several characteristics. For example, lone mothers, mothers with long career interruptions, and mothers with more than a high school education incurred greater losses than married or common-law mothers, mothers with no or short career interruptions, and mothers with no more than a high school education.

From Zhang, Xuelin. 2009. "Earnings of women with and without children," Perspectives on Labour and Income. Vol. 10, no. 3. March. Statistics Canada Catalogue no. 75-001-XIE.

End of text box

Earnings in dual-income families

The incidence of dual–income families has increased over time. In 1976, only 47% of husband–wife families were dual–income; by 2008, 64% of husband–wife families were dual–earner. Much of this increase took place prior to 1990, when 61% of husband–wife families were dual–earners (Chart 2).

Chart 2 Dual-earner families as a percentage of all husband-wife families, 1976 to 2008

As women's education and incomes have increased, the incidence of dual-earner families in which the wife earned more than the husband has also grown. In 1976 about 12% of wives in dual-earner families earned more than their husbands; by 2008, this share had increased to 29% (Chart 3).

Chart 3 Percentage of dual-earner families in which wives earned more than husbands, select years, 1976 to 2008

Interestingly, the average total income was lower in families in which the wife earned more than the husband. For example, the average total income for a family in which the wife earned more was $101,000; in dual-earner families in which the husband earned more it was $116,400 (Table 11).

Table 11 Average total family income in dual-earner families, by major income earner, select years, 1976 to 2008

Low income

There are several ways to measure low income. This chapter uses Statistics Canada's low income after-tax cut-offs (LICO-1992 base). For data related to the low income measure (LIM) see Table 20 at the end of the chapter.

Women with low incomes

The incidence of low income has decreased for both women and men over the last three decades. In 1976, almost 15% of women and 11% of men lived low-income situations. By 2008, 10% of women and 9% of men lived in low income (Table 12).

Table 12 Percentage of persons in low income after tax 1992 base, select years, 1976 to 2008

The incidence of living in low income varies somewhat by age. About 9% of women and men younger than 18 were classified as low-income. In the 18-to-64 age group, 11% women and 10% of men were classified as living in low income.

Those in the 65-and-older age group saw the largest decline over the 1976-to-2008 period: the incidence of low income fell from 29% in 1976 to just under 6% in 2008. While both women and men in this age group saw declines in low-income rates, for women the decline was much more pronounced. For example, in 1976, 34% of women 65 and older were classified as low income. By 2008, this had decreased to just under 8%. For men aged 65 and older, over the same period, the incidence of low income declined from 23% to 4%.

Low income and family status

In 2008, about 7% of those living in non-elderly families were classified as low income, compared with just under 3% of elderly families (Table 13). This is a reversal from 1976, when 18% of elderly families had low-income status, compared with 10% of individuals in non-elderly families.

Table 13 Percentage of persons in low-income after tax, by economic family type, select years, 1976 to 2008

Among non-elderly couple families in 2008, 6% of those living in couple families with children or couples living alone had low income; those living in other couple families had the lowest incidence of low income, 2%.

Lone-parent families are generally more likely to have low income than are other non-elderly families. Moreover, low income has always been more prevalent in female-headed lone-parent families. For example, taken together in 2008, about 18% of individuals living in lone-parent families were classified as low income. However, when the family is headed by a female, the incidence of low income was 21%, compared with 7% for those living in male-headed lone-parent families.

Although lone-parent families have a higher incidence of low income than other family types, their incidence of low income after-tax has been declining. In 1976, 54% of those living in lone-parent families headed by women lived in a low-income situation. By 2008, the percentage of those in low-income families headed by a female had declined to 21%.

Children living in low income

About 606,000 children younger than 18 lived in low-income families in 2008, unchanged from 2007 but 29% fewer than in 2003. The proportion of children in low-income families was 9.0% in 2008, half the 1996 peak of 18%.

In 2008, 36% of all children (about 218,000) living in low-income families lived in a lone-parent family headed by a woman. Within female lone-parent families, 23% of children were living in low income in 2008, unchanged from 2007 but lower than the most recent peak of 56% in 1996.

The incidence of low–income after tax is also related to the sex of the major income earner. In families where the major income earner was female, the share of individuals living in low income in 2008 was 16% (Chart 4). When the major income earner was male, 6% of individuals were in a low-income situation. Although the percentage of individuals living in low income is always higher when the major income earner in a family is female, this share has been declining. In 1976, 34% of individuals in families where the woman was the major income earner lived in low-income; by 1986 this has decreased to 23%, and by 2008, it was 16%. For families in which men were the major income earner, the share of individuals living in low income declined—from 9% in 1976 to 8% in 1986 and 6% in 2008.

Chart 4 Percentage of persons living in low-income after tax, by sex of major income earner, select years, 1976 to 2008

Financial security

The assets, debts and net worth of individuals and families are keys to understanding economic well-being. For example, during periods of low or no income, a household with high assets may be in a position to liquidate them in order to meet their expenses. Among some groups, such as the elderly, economic well-being is not determined by income alone; net worth also plays a part. While those younger than 65 are trying to build up their stock of wealth (buying homes, building up Registered Retirement Savings Plans [RRSPs] or other investments), many of those 65 and over have already accumulated sufficient wealth to draw on in times of need.

Assets by family type

There are three types of assets; financial assets, tangible assets and business assets. Financial assets include savings, stocks, bonds, and RRSP investments. Tangible assets include things such as principal residence, other real estate, cars, collectables, and contents of a home.

In 2009, 98% of married couples without children at home had some kind of assets. The average total assets in 2009 were highest for this family type, at almost $659,000. Two-parent families with children had average assets of $567,000; and other family types, $561,000 (Table 14).

Table 14 Assets, debts and net worth, by family type, 2009

Comparing assets across family types, lone-parent families had the lowest average total assets. However, female lone-parent families had lower average total assets ($187,000) than lone-parent families headed by men ($282,000).

Median assets6 were lower than average assets for every family type, and differences between average and median values were pronounced. For example, while 'other' families had average total assets of more than $560,000, the median value of assets for this family type was $260,000, the lowest among all couple family types.

The same held true for female lone-parent families: average total assets were $187,000 in 2009 compared with a median value of $60,000, indicating that a large proportion of women in these family types had much lower assets. Conversely, while the median value of total assets ($200,000) were lower than the average value of assets ($282,000) for lone-parent families headed by men, the difference was less pronounced.


Monies owed on a mortgage, loan, line of credit, credit card, or student loans are the principal types of debt. In 2009, average total debts were highest for two-parent families with children, at just over $130,000. Married couples had an average debt of about $61,000 (Table 14).

Among lone-parent families, average debt levels were higher for men, at almost $129,000; female lone-parent families had an average total debt of about $68,000. As was the case for assets, median debt levels were substantially different across family types, ranging from $6,000 for married couples, to $85,000 for two-parent families with children.

Net worth

The net worth for a family is the value of their assets minus their debts. Average net worth in 2009 was highest for married couples without children in the home, $597,000. The net worth of two-parent families with children was lower, approximately $442,000 (Table 14).

Just as there were differences in assets and debts for female-headed and male-headed lone-parent families, there were also differences between the net worth of these types of families. Lone-parent mothers had an average net worth of $119,000; lone-parent fathers' net worth was about $135,000.

Examining median net worth, the difference is even more pronounced. The median net worth for lone-parent-mother families was $17,000; for lone-parent-father families, it was $80,000.

Retirement savings

Retirement planning and savings is another important indicator of future economic well-being. Although Canada has the Canada/Quebec Pension Plans, the government-supported retirement income system depends on other voluntary retirement savings opportunities, including private savings and employer pensions. Understanding the contributions and pension coverage of women and men helps provide information related to the future economic well-being of Canadians.

Contributions to pension plans

The Canada/Quebec Pension Plans are mandatory public pension plans that provide a basic level of earnings replacement for all Canadian workers. Both also provide ancillary benefits, such as disability benefits and survivor benefits.

In 2007, 16.3 million workers contributed approximately $34 billion to the Canada/Quebec Pension Plans. Just over 47% of contributors were women, who had average annual contributions of $2,453.25. Men's annual contributions averaged $2,992.17.7,8

The most commonly offered retirement plans by employers in Canada are registered pension plans (RPPs). There were more than 19,000 private and public pension plans in Canada in 2009—61% of these plans were defined benefit plans9 —up from 49% in 2005 (Table 15). Women accounted for 76% of the growth in RPP membership from 2005 to 2009. In 2009, they made up 49.1% of total membership, a slight increase over 2008.

In 2009, women made up about one-half of the 4.5 million members of defined benefit pension plans (Table 15).

Table 15 Registered pension plans and members, by type of plan and sex, select years, 1980 to 2009

There were about 6,900 defined contribution plans in Canada in 2009, down from about 7,500 in 2005. Fifty-nine percent of defined contribution plan members were men.

Roughly one-third of the labour force is covered by a registered pension plan (RPP). From 1992 to 2008, RPP coverage dropped for both women and men (Table 16). Men, however, experienced a sharper decline than women such that, beginning in 2007, women in the labour force were slightly more likely than men to be covered by an RPP.

Table 16 Proportion of labour force and paid workers covered by a registered pension plan, by sex, select years, 1992 to 2008

Among paid workers, RPP coverage declined from about 45% in 1992 to 38% in 2008. Coverage for men who were paid workers declined by about 11 percentage points over the 1992 to 2008 period; women's coverage declined 3 percentage points.

Contributions to Registered retirement savings plans

Registered retirement savings plans (RRSP) offer individuals a private tax-assisted retirement savings option. Approximately 6.2 million Canadians contributed more than $33 billion to RRSPs in 2008, down slightly from 2000 (Table 17).

Table 17 Registered retirement savings plan contributions, by sex, 2000 to 2008

Women comprised 47% of RRSP contributors in 2008, up slightly from 45% in 2000.

The median RRSP contribution was $2,700 in both 2000 and 2008. However, the median contribution for men was higher than that of women over the 2000 to 2008 period. For example, in 2008, the median RRSP contribution for men was $3,220, compared with $2,240 for women.

Although women made up almost one-half of RRSP contributors, their share of total contributions was lower. In both 2000 and 2008, women's RRSP contributions made up 39% of total contributions; men's accounted for 61%.

Home ownership and shelter affordability

Home ownership and housing affordability are also important determinants of economic well-being. While home ownership and shelter affordability are largely related to family status, examining the home ownership and housing affordability dimensions of economic well-being for women is nevertheless important.

Home ownership

Of the 12.4 million households in Canada, about 68%, or 8.5 million households, owned their dwelling in 2006, the highest rate of home ownership since 1971. The increase during the past five years continues the long-term trend in rising home ownership rates that began in 1991, after a period of low growth during the 1980s.

Home ownership is related, in large part, to a person's age, income and household type. For example, the home ownership rate for one-person households was 48%, compared with 68% among the general population (Table 18). Women who lived alone continued to have a higher home-ownership rate than their male counterparts: 49% of women living alone owned their home, compared with 47% of men living alone. Women homeowners living alone are likely to be older. Approximately one-half were aged 65 or older.

Table 18 Homeownership rates for select household types, 2001 and 2006

In 2006, for the first time, more than one-half of lone-parent households headed by women owned their home. In 2001, about 48% of lone-mother households owned their home; by 2006, this had risen to almost 53%.

Nearly 6 of every 10 households that owned their home had a mortgage. Of the 8.4 million households that owned their home, 4.9 million, or 58%, had a mortgage, up from 55% since 2001 and the highest share since 1981. Correspondingly, the proportion without a mortgage fell from 45% to 42%.

Shelter affordability among homeowners

Shelter is the largest expenditure for most households, and its affordability can affect well-being. Measuring affordability involves comparing housing costs to a household's ability to meet them. One common measure of housing affordability is calculated using the the shelter cost-to-income ratio (STIR). According to this measure, households reach an upper limit of housing affordability when they spend 30% or more of their income on shelter costs.

In 2006, an estimated 3 million households, or 25% of all households, spent 30% or more of their income on shelter. Among homeowners, 18% of all households spent 30% or more of their income on shelter—up from 16% in 2001 (Table 19).

Among those living alone who owned their accommodation, 31% spent 30% or more of their income on shelter in 2006, up from 29% in 2001. Women living alone were slightly more likely to spend 30% or more of their income on shelter than were men living alone—32% of women and 30% of men.

About 30% of lone mothers who owned their accommodation spent 30% or more of their income on shelter, up from 27% in 2001. This compares with 21% of lone fathers.

Shelter affordability among renters

Shelter affordability is an issue not only for homeowners: anyone spending 30% or more of their income on housing (shelter) costs may face economic uncertainty or hardship. Households that rented comprised 51% of households that spent 30% or more of their income on shelter.

Table 19 Percentage of lone-parent owner and renter households spending 30% or more of their income on shelter, 2001 and 2006

In 2006, 1.5 million renters, or 40% of all renters, spent 30% or more of their household income on shelter, about the same as in 2001 (Table 19).

In 2006, about 45% of lone-mother households that rented their accommodation spent at least 30% of their income on shelter, down from 50% in 2001. Among lone-father households that rented, that proportion declined from 32% in 2001 to 30% in 2006.

Women living alone who rented were the most likely to spend 30% or more of their income on shelter: 57% did so in 2006, up from 56% in 2001. However, male renters who lived alone and spent 30% or more of their income on shelter had the largest percentage point increase between censuses—from 43% in 2001 to 46% in 2006.

Table 20 Low income measure after tax, by sex and age, select years, 1976 to 2008

Text box 2

The gender pay gap revisited

When comparing earnings of women and men, the data show that men earn more than women. For example, the ratio of female–to–male annual earnings for full-year full-time workers has been relatively steady at around 0.72 since 1992. However, examining the female–to–male earnings ratio as a means to examine the existence and size of a gender pay gap may not be appropriate—particularly because among men and women working full-time, weekly work hours differ: according to the Labour Force Survey, men employed full-time usually worked 3.7 hours longer than full-time women in 2007.

Gender differences in pay may be more appropriately measured using hourly wages. Comparing the average hourly wages of women and men, the ratio was 83.3% in 2008 – up from 75.7% in 1988 (Box Table 1).10

Examining the wage ratio by age across time illustrates differences between the age groups. In general, for each age group, there has been increase in the wage ratios between 1988 and 2008. For example, the female–to–male wage ratio for workers aged 25 to 29 was 0.846 in 1998 but had increased to 0.901 by 2008. Similarly, the wage ratio for those aged 50 to 54 increased 16.2 percentage points from 0.645 in 1988 to 0.807 in 2008.

The hourly wage gap is larger (the female–to–male ratio is smaller) for older workers compared to younger workers. This difference may be a result of generational differences between women. For example, younger women are more likely to have high levels of education, work full-time and be employed in different types of jobs than their older female counterparts.

Box Table 1 Female–to–male average hourly wage ratio, select years, 1988 to 2008

End of text box


Text box 3

Factors contributing to the decline in the gender wage gap

Because the gender wage gap differs by age, it is not surprising that the explanations for differences in wages also differ for each age group. While much of the change in the wage ratio is a result of changes in the work and personal characteristics of women, it is important to note that in some instances it is changes in the work status of men that are behind the change in the ratio. For instance, while the oldest age group of the study population saw the biggest improvement in the wage ratio between 1988 and 2008 (an increase of 16.2 percentage points), much of this increase was driven by the fact that men in 2008 were much less likely to be in management occupations than in 1988. This accounted for about 28% of increase in the wage ratio for this age group (Box Table 2). Additionally, 15% of the increase in the ratio was attributable to changes in job tenure for women, since women in 2008 were more likely to have long job tenure than women in 1988.

In the case of the 25 to 29 year old age group, 66% of the change in the wage ratio between 1988 and 2009 can be explained by the changes in characteristics of workers. About 28% of the change in the ratio was a result of improvements in the level of education of women; 27% was a result of changes in union status (mainly because the unionization rate for men fell); and 19% was attributable to changes in the occupational composition of young women—as young women moved out of sales, service and clerical occupations into higher paid occupations in the health and education fields. Another 13% of the difference was a result of longer job tenure and a shift away from part-time work for women. About one-third of the change for this age group could not be explained by differences in the characteristics studied.

In general, women continue to have average hourly wages that are lower than men's. Nevertheless, the gap between the wages of women and men has declined. The reasons underlying the changing gap are complex. However, because the characteristics of women and men entering the labour market in 2008 are more likely to be similar today than in the past, part of the increase in the wage ratio (narrowing of the wage gap) is a result of older cohorts of men and women with very different personal and labour market characteristics leaving the labour market and being replaced by a younger cohort of women and men whose personal and labour market characteristics are more similar.

The data are drawn from the Labour Market Activity Survey (LMAS), the Survey of Labour and Income Dynamics (SLID) and the Labour Force Survey (LFS). The unit of measurement is hourly wages expressed in 2007 dollars.

Adapted from: Drolet, Marie. (Forthcoming). "Why has the gender wage gap narrowed?" Perspectives on Labour and Income. Statistics Canada Catalogue no.75-001-X.

Box Table 2 Decomposition of the change in the average hourly female-to-male wage ratio between 1988 and 2008, by age group

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  1. Although it is not possible to determine how income is divided within the household, the 2009 Canadian Survey of Financial Capability provides some information about the household financial management. In 2009, more than 75% of women in couple families stated that they were either solely responsible for the management of household income and investment decisions, or that they shared these responsibilities with their spouse and about 15% stated that their spouse was responsible for the household financial management.
  2. Total income includes income from all sources including wages, salaries, pensions, investments and government transfers.
  3. All income figures are presented in 2008 constant dollars.
  4. More information on the composition of income for senior women can be found in the forthcoming chapter on senior women.
  5. For information on the share of women in select occupations, see the Paid Work chapter.
  6. Both average and median measures can be used to describe net worth, but each provides a different picture. Median is determined by ranking all family units from highest to lowest net worth. The value of the asset (or debt or net worth) of the family unit in the middle of the range is the median. Average (or mean) net worth is determined by dividing the total net worth of all family units by the number of family units. The more the average exceeds the median, the more the wealthiest family units in the country contribute to the increase in the average.
  7. Average contribution calculations are for Canada Pension Plan only.
  8. Data for Canada/Quebec Pension Plans are from: Human Resources and Skills Development Canada. 2009. The Canada Pension Plan and Old Age Security Stats Book 2009, accessed October 19, 2010.
  9. A defined benefit plan sets the benefits to be paid according to a formula stipulated in the plan usually based upon salary and years of service.
  10. For a full discussion of the differences in the gender wage gap and the gender earnings gap see: Baker, M. and Drolet, M. "A new view of the male/female pay gap", Canadian Labour Market and Skills Research Network. Working paper No. 50. December 2009.
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