Chapter 6: Income and earnings

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Women’s incomes lower

Women generally have lower incomes than men. In 2003, the average annual pre-tax income of women aged 16 and over from all sources, including employment earnings, government transfer payments, investment income, and other money income, was $24,400. This was just 62% the figure for men, who had an average income of $39,300 that year. (Chart 6.1)

Chart 6.1 Average income of women and men, 1993, 1997 and 2003

It should be noted that in analyzing income data for individuals, payments for some government transfer programs, including social assistance, child tax benefits, and seniors benefits, are not taxable and are allocated to only one family member depending on variables such as age, income, and gender. As such, readers should be aware that these transfers are not equally divided among family members.

The average incomes of women, however, have risen somewhat faster than those of men in recent years. In fact, the average income of women in 2003 was 13% higher than the figure in 1997, once the effects of inflation have been factored out. In contrast, the real average income of men rose 8% in the same period.

Income by age

Women between the ages of 35 and 54 have higher incomes than women in other age groups. In fact, in 2003, women in both the 35 to 44 and 45 to 54 age groups had average incomes of around $31,000, while the figure among women in other age groups ranged from $25,400 among those aged 25 to 34 to only $13,000 for women aged 20 to 24 and under $6,000 for teenaged women aged 16 to 19. (Table 6.1)

Table 6.1 Average income of women and men, by age, 2003

At all ages women’s incomes are lower than those of men, although there is considerable variation in the gap between the incomes of women and men in different age ranges. Among those aged 55 to 64, for example, the income of women from all sources was barely over half that of men in their pre-retirement years. Similarly, the average incomes of women between the ages of 35 to 54, again the age range in which women’s incomes are the highest, were around 60% those of their male counterparts, while the figure was close to 70% for both women aged 25 to 34 and seniors. In contrast, the average incomes of women aged 20 to 24 were over 80% those of males in this age range, while the figure was almost 90% for teenagers. In both these latter cases, though, the incomes of females were relatively close to those of males, in large part, because the incomes of both women and men in these age ranges tend to be low.

Incomes vary by province

Women in Ontario have the highest average income of women in Canada, while those in the Atlantic provinces have the lowest. In 2003, women living in Ontario had an average income of $26,100, while the figure was $24,100 in Alberta, and around 23,500 in each of Quebec and the other western provinces. In contrast, in the Atlantic region, the average income of women ranged from $21,500 in Nova Scotia to only $19,000 in Newfoundland and Labrador. (Table 6.2)

Table 6.2 Average income of women and men, by province, 2003

The average incomes of women, though, are well below those of men in all provinces. The biggest gap is in Alberta, where the incomes of women in 2003 were just 56% those of their male counterparts. The figure was also just 60% in Ontario, while in the remaining provinces it ranged from 63% in Nova Scotia to highs of 68% in both Manitoba and Saskatchewan.

Incomes of lone-parent families up

The income situation of women also varies greatly depending on their family status. Most notably, lone-parent families headed by women have, by far, the lowest incomes of all family types. In 2003, families headed by female lone parents under age 65 had an average income of $32,500, 38% the figure for non-elderly two-spouse families with children and less than 60% that of lone-parent families headed by men who had an average income of $54,700. (Table 6.3)

Table 6.3 Average family income, by family type, 1980 to 2003

The average incomes of female-headed lone-parent families, though, are somewhat higher than they have been in the recent past. The average income of these families in 2003, for example, was 18% higher than in 1997 once the impact of inflation had been accounted for. This followed almost two decades in which there was almost no change at all in the real incomes of lone-parent families headed by women. Indeed, the average income of these families in 1997 was actually almost $2,000 less than the figure in 1980, even with the impact of inflation taken into account.

However, after several years of relatively substantial growth, the average incomes of lone-parent families headed by women have dropped in the last two years. Indeed, the average income of these families peaked in 2001 at just under $35,000, but by 2003 had fallen 7% to the current figure of $32,500. In contrast, the average incomes of other families such as two-parent families with children and lone-parent families headed by men both continued to rise in the same period.

Relatively low incomes among unattached women

The incomes of unattached women, including those who either live alone or in a household where they are not related to other household members, also tend to be relatively low. The average income from all sources of unattached women aged 16 and over with at least some income was $28,100 in 2003, almost $6,000 less on average per person than unattached men who had an average income of close to $34,000 that year. (Table 6.4)

Table 6.4 Average income of unattached women and men, by age, 2003

Unattached women between the ages of 35 and 54 have higher average incomes than either their younger or older counterparts. In 2003, unattached women aged 45 to 54 had average incomes of over $43,000, while the figure was $37,200 for those aged 35 to 44. In contrast, in other age ranges, the figure ranged from just over $30,000 for those aged 25 to 34 to only $12,400 for unattached women under the age of 25.

As a general rule, the incomes of unattached women are below those of their male counterparts regardless of age. The exception, though, are unattached women aged 45 to 54 whose average incomes are actually higher than unattached men in this age range. On the other hand, the average incomes of unattached women in other age ranges were less than those of unattached men in the same age group, although in almost all age ranges the gap was relatively small. That year, for example, the average income of unattached women as a percentage of that of men ranged from 87% among those aged 25 to 34 to 71% for those under the age of 25.

Major sources of income

Earnings from employment, including wages and salaries, as well as net income from self-employment, make up the largest source of the income of women in Canada. In 2003, 70% of all the income of women came from these sources, while 17% came from government transfer programs,¹ 6% was income from private retirement pensions, 4% came from investments, while 3% was money from other sources.² (Table 6.5)

Table 6.5 Composition of income of women and men with income, 2003

While employment earnings account for the largest share of the income of women, 70% in 2003, this figure is below that of men who received almost 80% of all their income from these sources. In addition, in terms of the actual dollars involved, women received, on average, over $14,000 less in employment earnings per person that year than did men.

In contrast, women receive a larger portion of their total income than men from government transfer payments. In 2003, 17% of the total income of women came from transfer payments, double the figure of men who received only 9% of their total income from these sources.

In terms of the actual dollars, however, women received only about $800 more in transfer payments than men in 2003. That year, women received, on average, $4,200 in benefits from government transfer programs, compared with $3,400, on average, for men.

Old Age Security (OAS) payments, including Guaranteed Income Supplements (GIS), make up the single largest component of government transfer benefits received by women. In 2003, 5% of all the income of women came from this source, including 4% in regular OAS benefits and another 1% as GIS supplements. At the same time, 4% of all women’s income came from the Canada and Quebec Pension Plans, while 3% were Child Tax benefits, 2% were social assistance benefits, and another 2% were employment insurance payouts.

The overall composition of the income of women and men in all age groups, however, masks the fact that there are considerable differences between the primary sources of income of seniors and those under the age of 65.³ In 2003, for example, well over half (55%) the income of senior women in Canada came from government transfer programs, compared with 15% of that of women aged 55 to 64, and 10% or less of that of women in age ranges under age 65. (Chart 6.2)

Chart 6.2 Government transfer payments as a percentage of the total income of women and men, by age group, 2003

Lone-parent families more dependent on transfers

Government transfer payments also make up a relatively large share of the income of lone-parent families headed by women. In 2003, 27% of all income of these families, versus 11% of that of male-headed lone-parent families and just 6% of that for twoparent families with children, came from transfer payments. (Table 6.6)

Table 6.6 Composition of family income, by family structure, 2003

As with other families, earnings make up the largest share of the income of femaleheaded lone-parent families, although these families get a much smaller share of their income from employment-related sources than other non-elderly families. In 2003, just 63% of the income of female-headed lone-parent families came from either wages and salaries or net income from self-employment, compared with 86% of that of families with a lone male head and over 90% of that of two-parent families with children.

Women contributing to pension plans

There have been some interesting changes in the pattern of women and men contributing to the various forms of retirement pension plans in recent years. On the one hand, a slightly greater proportion of women are now covered by employer-sponsored pension plans than two decades ago. In 2002, 39% of all employed women were members of such plans, compared with from 38% in 1980. (Table 6.7)

Table 6.7 Membership in employer-sponsored pension plans, 1980 to 2002

In contrast, the proportion of men covered by employer-sponsored plans has dropped sharply in the same period, falling from 54% in 1980 to 40% in 2002. As a result, the proportion of female workers currently covered by a private pension is virtually the same as that for men. Indeed, by 2002, women made up 46% of all workers covered by employer-sponsored pensions, compared with just 31% in 1980.

The overall long-term increase in the proportion of employed women contributing to an employer-sponsored pension plan, though, masks the fact that the share of women participating in these plans has declined in the past decade. Indeed, the proportion of employed women contributing to a private pension plan peaked at around 42% in the early 1990s and dropped to the current figure of 39% by the late 1990s. On the other hand, there has been almost no change in the share of women participating in these plans in the 2000s. In contrast, the share of employed men participating in these plans declined fairly consistently right through this period.

There has also been an increase in the proportion of women in Canada contributing to the Canada/Quebec Pension Plan in the past two decades as more women have joined the paid workforce. In 2002, 68% of all women aged 20 to 64 contributed to this program, up from 57% in 1981. In contrast, the share of working-aged men participating in this program has fallen in the same period, although the share of men currently contributing to these plans (74%) is still higher than that for women. (Chart 6.3)

Chart 6.3 Contributors to Canada/Quebec Pension Plans as a percentage of women and men aged 20 to 64, 1981 to 2002

There has also been an increase in the proportion of women contributing to Registered Retirement Savings Plans (RRSPs) in the last two decades. In 2002, 2.8 million women reported contributing to an RRSP. That year, 24% of all female taxfilers were RRSP contributors, up from less than 20% in 1990 and just 10% in 1982. (Table 6.8)

Table 6.8 Contributors to Registered Retirement Savings Plans, 1982 to 2002

Women, though, are still somewhat less likely than men to contribute to an RRSP. In 2002, 24% of female taxfilers contributed to an RRSP, compared with 29% of their male counterparts.

Women also tend to contribute less to their RRSPs than men, although since RRSP contribution limits are linked to earnings, this difference may simply reflect the fact that women’s earnings are also lower, on average, than men’s. In 2002, women who purchased an RRSP contributed an average of just under $3,500, about $1,400 less than the average contribution for men. (Chart 6.4)

Chart 6.4 Average RRSP contributions of women and men in constant 2002 dollars, 1982 to 2002

The average RRSP contribution made by women has increased in the past decade or so. After accounting for inflation, the average contribution of women to their RRSP was 27% higher in 2002 than in 1991. Trends in the RRSP contribution levels of women, though, generally mirror those of men. Indeed, the average contribution by men rose 23% in the same period.

Average earnings still lower

The average earnings of employed women are still substantially lower than those of men. In 2003, employed women had average earnings of just under $25,000, a figure that was only 64% that of all men with jobs. (Table 6.9)

Table 6.9 Average annual earnings of women and men, by employment status, 1967 to 2003

Even when employed on a full-time, full-year basis the earnings of women remain well below those of their male counterparts. In 2003, women working full-time, fullyear had average earnings of $36,500, or 71% what men employed full-time, full-year made that year.

As well, while there have been some year-to-year fluctuations, the gap between the earnings of women and men has not changed substantially in the past decade. Indeed, the current difference is actually slightly lower than the peak figure of 72% recorded in the mid-1990s. This is in contrast to the two previous decades when women’s earnings as a percentage of those of men rose relatively quickly.

Earnings and education

Not surprisingly, women’s earnings rise sharply the higher their level of educational attainment. Female university graduates working full-time, full-year, for example, earned an average of $53,400 in 2003, whereas no other educational grouping of women made over $35,000 that year. Indeed, women with less than a Grade 9 education earned only $21,700 that year. (Table 6.10)

Table 6.10 Average annual earnings of women and men employed full-time, full-year, by educational attainment, 2003

Still, whatever their level of educational attainment, women’s earnings are well below those of their male counterparts. In fact, with the exception of the relatively small group of those with only some postsecondary education, the earnings of women employed on a full-time, full-year basis in 2003 were only about 70% those of their male colleagues at all levels of education.

Earnings and occupation

As with men, women in professional and related occupations generally have considerably higher incomes than women in other occupational groups. In 2003, women employed on a full-time, full-year basis as either social sciences or health professionals had average earnings of over $60,000, while those employed in the natural sciences or as business and finance professionals made over $55,000. At the same time, women in management positions, as well as teachers, had annual earnings close to $50,000 that year. In contrast, the average annual earnings of women employed full-time, full-year in non-professional occupations ranged from just under $36,000 for those employed in administrative positions and $33,300 for those in clerical jobs to just over $19,000 for those working in primary industries. (Table 6.11)

Table 6.11 Average annual earnings of women and men, by occupation, 2003

Women’s earnings, though, are well below those of men in all occupational categories; there is, however, no real pattern in this diversity. Among those in professional categories, for example, the 2003 earnings ratio for women and men employed full-time, full-year was around 80% for those working in either the natural sciences or as artistic and recreational professionals, while the figure was close to 70% among those employed in teaching or the social sciences. In contrast, women in managerial positions, as well as business and financial professionals, had earnings which were only about 60% those of their male counterparts. At the same time, the figure among professionals employed in health-related professions was under 50%. However, this figure is skewed by the fact that almost all men in this field are employed as doctors or other diagnosing professionals, while many women are employed as lower-paid nurses.

There is also considerable diversity in the gap between women’s and men’s earnings in non-professional occupations. In these areas, women’s earnings as a percentage of those of men in 2003 ranged from close to 80% for those employed full-time full-year in clerical positions to under 60% for those employed in jobs in each of the sales and service, trades or transportation, and manufacturing sectors.

Earnings and age

The earnings of women tend to be higher for those over the age of 35 than their younger counterparts. In 2003, women between the ages of 35 and 54 employed full-time, fullyear had average earnings of $40,000, while the figure was $36,000 for those aged 55 and over. In contrast, the average earnings of women employed full-time were around $32,000 for those aged 25 to 34 and under $20,000 for those aged 16 to 24. (Table 6.12)

The earnings of women compared to those of men, however, tend to be highest in younger age groups. In 2003, the female-to-male earnings ratio for those working fulltime, full-year was 81% among those aged 16 to 24 and close to 75% for women aged either 25 to 34 or 35 to 44, compared with under 70% for both those aged 45 to 54 and 55 and over.

Earnings and marital status

Overall, there is little variation in the earnings of women depending on their marital status. In 2003, women employed full-time who were either separated, divorced or widowed had average earnings of $37,600, compared with $36,800 for married women and $34,600 for single, never-married females. (Table 6.12)

Table 6.12 Average annual earnings of full-time, full-year workers, by age and marital status, 2003

The earnings of single, never-married women, though, are relatively close to those of their male counterparts. In 2003, the earnings of single women employed on a fulltime, full-year basis were 94% those of single men. In fact, among single, never-married people over the age of 45, women actually make more than men.

In contrast, married women make considerably less than their partners. Indeed, in 2003, the earnings of married women employed on a full-time, full-year basis were just 65% those of married men, while the figure was 77% among other women. As well, in both cases the earnings of women were substantially below those of their male counterparts in almost all age categories.

Earnings of wives in dual-earner families

The influx of married women into the labour force over the past three decades has resulted in an increase in the number of dual-earner families. In 2003, both spouses were employed in 66% of all two-spouse families, including both married and common-law couples, double the figure in 1967 when both spouses were employed in just 33% of such families. However, almost all of this increase occurred prior to 1990, although there was also a modest increase in the late 1990s. (Chart 6.5)

Chart 6.5 Dual-earner families as a percentage of all husband-wife families, 1967 to 2003

There has also been little change in the share of total family earnings being contributed by wives in recent years. In 2003, wives’ earnings represented 34% of the income of dual-earner families, a figure that has not changed appreciably since 1998. In contrast, this figure had grown rather consistently in the preceding three decades, rising from 26% in 1967 to 34% in 2003. (Chart 6.6)

Chart 6.6 Earnings of wives as a percentage of total income in dual-earner families, 1967 to 2003

There has, however, been a modest increase in the percentage of wives who earn more than their husbands in the past several decades. In 2003, 28% of wives in dualearner families had employment earnings that were greater than those of their husbands, up from 23% in 1991 and just 11% in 1967. (Chart 6.7)

Chart 6.7 Percentage of dual-earner families in which wives earned more than husbands, 1967 to 2003

The relative importance of wives’ earnings to total family income is reflected in the percentage of families whose income would fall below the Low Income Cut-offs were it not for the contribution of wives’ earnings. In 2003, just over 120,000 dual-earner families, 3% of the total, had low incomes. It is estimated, however, that if wives’ earnings were deducted from the income of these families, the number of these families with low incomes would jump to over 400,000, or 9% of the total. (Chart 6.8)

Chart 6.8 Percentage of dual-earner families with low income after tax, by presence of wives’ earnings, 2003

Women with low incomes

Women make up a disproportionate share of the population in Canada with low incomes. In 2003, 1.9 million females, 12% of the total female population, were living in an aftertax low-income situation. At the same time, 11% of the male population had low incomes. That year, females accounted for 53% of all Canadians classified as having low incomes. (Table 6.13)

Table 6.13 Females and males with low incomes after tax, 1980 to 2003

The proportion of the female population classified as living in a low-income situation is currently somewhat lower than it has been throughout the past couple of decades. In 2003, 12% of all females were considered to be living in a low-income situation, once taxes had been factored in, whereas the figure had been as high as 17% in the mid-1990s.

There has been a particularly sharp drop in low-income rates among senior women. In 2003, just 9% of women aged 65 and over lived in an after-tax low-income situation, compared with over 25% in the early 1980s when senior women were by far the most likely age group to be considered to have low incomes. Indeed, women aged 65 and over are currently actually less likely than their counterparts under age 65 to live in a lowincome situation. (Table 6.14)

Table 6.14 Percentage of females and males living in a low-income situation after tax, by age, 1980 to 2003

The share of senior women with low incomes, though, is still twice as high as that of senior men. In 2003, 9% of women aged 65 and over, versus just over 4% of their male counterparts, lived in an after-tax low-income situation. Women between the ages of 18 and 64 were also somewhat more likely to have low incomes than their male counterparts in 2003: 13% versus 11%. In contrast, female children were slightly less likely than male children to live in a low-income family that year.

Low income and family status

Unattached women are particularly likely to have low incomes. In 2003, 31% of unattached women aged 16 and over had incomes below the after-tax Low Income Cut-offs, while this was the case for 28% of their male counterparts. (Chart 6.9)

Chart 6.9 Percentage of unattached women and men living with low incomes after tax, by age, 2003

Young adults are the most likely unattached women to have low incomes. Indeed, in 2003, 65% of women aged 16 to 24 living alone were considered to have low incomes, once taxes had been accounted for. At the same time, this was the case for 38% of unattached women aged 55 to 64, 30% of those between the ages of 35 and 54, 24% of those aged 25 to 34, and just 19% of seniors.

As reported in Chapter 11 on Senior Women, the incidence of low income among unattached senior women has dropped sharply since the early 1980s. In 2003, 19% of these women were classified as having after-tax low incomes, down from 57% in 1980.

Despite the dramatic decline in low-income rates among unattached senior women, they are still considerably more likely than unattached senior men to have incomes below the after-tax Low Income Cut-offs. In 2003, 19% of unattached women aged 65 and over had after-low incomes, compared with 15% of unattached senior men. Young unattached women, as well as those aged 35 to 44, were also more likely to have low incomes than their male counterparts, whereas there was little difference in the lowincome rates among unattached women and men in other age ranges.

Many lone-parent families headed by women with low incomes

Families headed by female lone parents also have relatively high rates of low income. In 2003, 38% of all families headed by lone-parent mothers had incomes which fell below the after-tax Low Income Cut-offs. In comparison, this was the case for 13% of male lone-parent families and just 7% of non-elderly two-parent families with children. (Table 6.15)

Table 6.15 Percentage of families with low income after tax, by family type, 1980 to 2003

The incidence of low income among female-headed lone-parent families, however, has declined somewhat in recent years. In 2003, 38% of these families had after-tax low incomes, whereas in the period from the early 1980s to the mid-1990s, the figure hovered around 50%.

Despite the overall decline in the incidence of low-income among lone-parent families headed by women, these families continue to be home to a disproportionate share of all children living in low-income situations. In 2003, 43% of all children in a low-income family were living with a single female parent, whereas these families accounted for only 13% of all children under age 18 that year. (Chart 6.10)

Chart 6.10 Children in lone-parent families headed by women as a percentage of all low-income children, 2003

Homeownership

Women’s homeownership characteristics are related, in large part, to their family status. Women living in two-spouse families, for example, are far more likely than other women to own their own homes. In 2003, 80% of women who were partners in a husband-wife family⁴ lived in an owner-occupied home, compared with 45% of female lone parents. At the same time, just over half (53%) of female seniors who lived alone and just 38% of unattached women aged 15 to 64 owned their homes. (Table 6.16)

Table 6.16 Housing tenure, by household type, 2003

Female lone parents are also less likely than male lone parents to own their homes. In 1997, 45% of female lone parents were homeowners, compared with 66% of families headed by male lone parents. On the other hand, unattached women aged 65 and over were only slightly less likely than their male counterparts to own their homes, 53% versus 56%, while among unattached individuals under age 65, women were slightly more likely than men, 38% compared with 35%, to be homeowners.

While relatively few unattached women own their homes, a large proportion of those who are homeowners have paid off their mortgages. This is especially true of unattached senior women. In 2003, exactly 50% of all unattached females aged 65 and over owned their homes outright, while only 3% had a mortgage. At the same time, close to half of female lone-parent homeowners were also mortgage-free. That year, 21% of all female lone parents owned a home without a mortgage, while 25% still had a mortgage. In fact, female lone parents were about as likely as their male counterparts to own a mortgage-free home.

Housing affordability

Many women experience housing affordability problems,⁵ especially unattached women and female lone parents who rent their homes. Indeed, in 2003, 72% of unattached women aged 65 and over who rented were considered to have housing affordability problems. Similarly, 42% of renter families headed by female lone parents had housing affordability problems, as did 38% of unattached female renters under the age of 65. (Chart 6.11)

Chart 6.11 Percentage of women and men paying 30% or more of total gross household income on shelter costs, by household type, 2003

In fact, in those categories in which statistical comparisons are possible, females are more likely than their respective male counterparts to experience housing affordability problems. Among unattached seniors who rented in 2003, for example, 72% of women, versus 58% of men, were considered to have housing affordability problems. Similarly, among unattached homeowners under age 65, 24% of women, compared with 11% of males, had housing affordability problems.

Women who own their homes are considerably less likely than those who rent to have housing affordability problems. Still, among women who owned their homes in 2003, 24% of unattached women under age 65, 20% of unattached seniors, and 17% of female lone parents had housing affordability problems. In contrast, only 8% of women in two-partner households which owned their home were considered to have housing affordability problems. As well, as with renters, female homeowners in these groups were more likely than their male counterparts to have housing affordability problems.

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Notes

1. Government transfer payments include all social welfare payments from federal, provincial, and municipal governments, including Child Tax Benefits, Old Age Security and Guaranteed Income Supplements, Spouse’s Allowances, Canada and Quebec Pension Plan benefits, Employment Insurance, worker’s compensation, training allowances, veteran’s pensions, social assistance, and pensions to the blind and persons with disabilities. Refundable tax credits and Goods and Services Tax Credits are included as income.
2. Other money income includes alimony and child support payments, annuities, superannuation, scholarships, and other items not included in other categories.
3. The income of senior women and men is discussed in more detail in the chapter on Senior Women.
4. Includes those living in a common-law relationship.
5. Those with housing affordability problems include families and unattached individuals that spend 30% or more of their total household income on shelter costs. It should be noted, however, that those paying 30% or more of their income on shelter may not necessarily have a housing affordability problem; some, for example, may be paying down their mortgage quickly.