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Transferring income to families with children has long been a basic Canadian social policy. Though motivated by a range of goals, a central expectation has been that higher family income will lead to better child outcomes, especially in low-income families. This paper presents a synthesis of Canadian research estimating the effect of household income on measures of child development and well-being. While child outcomes and socioeconomic status (SES) are highly correlated, the effect of income on child outcomes, controlling for other SES factors, is found to be statistically significant but of much smaller magnitude than correlation alone indicates. The paper also discusses key theoretical and methodological issues in this area of research, identifies areas for future research, and draws implications for public policy design. [ABSTRACT FROM AUTHOR]

Income inequality is on the rise, and everyone, from President Obama and Pope Francis to Prince Charles and Standard & Poor’s, is talking about it. But these conversations about what are arguably the most significant changes in the distribution of incomes and earnings since the 1940s are leading to very different views on how public policy should respond. This is as true in Canada as it is in almost all of the other rich countries where inequality has risen. In this paper, I tell two stories about inequality—one from the perspective of those who feel it is not a problem worth the worry, and the other from the perspective of those who see it as the defining challenge of our time—to clarify the issues facing Canadians and what public policy should do about them. [ABSTRACT FROM AUTHOR]

Human capital policy has come to be seen as something of a panacea: acting both as a necessary input for modern growth and an effective tool for redistribution. Canada has moved strongly in the direction of linking redistribution and human capital investment. In this paper, I investigate the empirical evidence and theoretical arguments behind the claim that increasing skills investment opportunities and tying transfers to human capital investments while decreasing traditional income support will ultimately lead to a more equal, more just society. Whether this is true, of course, will depend on the notion of justice one adopts. One of my goals in this paper is to examine the implications of the kind of policy path Canada is following under different notions of fairness. I conclude that both empirical evidence and fairness considerations indicate that human capital policy does not make good redistributive policy. [ABSTRACT FROM AUTHOR]

Demographic change and policy reorientation are often conflated with economic and social changes in anticipating the social and policy implications of demographic aging. In this paper, an attempt is made to begin to disentangle these factors to gain a clearer sense of the implications of population aging for social and policy responses. Analyzed here are selected socio-economic changes that intervene in the connection of demographic aging to policy, such as actual working patterns by age, education to work timing, retirement patterns, productivity shifts, pension investment shifts, policy changes such as the move toward economic liberalism and away from redistribution and social protection, changing family patterns, and shifts among generations in terms of wealth inequality. These are related to shifts in demographic age structures. Data which are more illustrative than the analytical focus of the paper, come largely from various Statistics Canada sources. [ABSTRACT FROM AUTHOR]

In this paper we re-examine inequality in Canada with a comprehensive look at inequality trends in Atlantic Canada during the period 1969 to 1996. We use consumption expenditure as a measure of family well-being and compare it with the income-based measures of well-being. The results of this study reveal the following: (a) consumption distribution is more equal than the income distribution; (b) inequality trends are sensitive to how family resources are measured; (c) consumption inequality in Atlantic Canada fluctuated considerably until the mid-1980s; and (d) tax and transfer policies have played an important role in reducing income disparities in Atlantic Canada as well as in the rest of Canada. Overall, consumption inequality has continually been lower in Atlantic Canada in comparison to the rest of Canada. The paper also examines the role of key socio-demographic factors using a decomposition methodology. [ABSTRACT FROM AUTHOR]

This paper examines the implication of the decision to give 2006 Census respondents the option of letting Statistics Canada access their income tax files rather than answering income-related questions directly. We find that giving respondents the option to share their income tax files (or not) adds a confounding factor when it comes to measuring family-income inequality, particularly for the bottom tail of the distribution. The consent decision does not, however, materially affect the estimation of standard wage equations. [ABSTRACT FROM AUTHOR]

This paper examines the effects of community characteristics on volunteering using data from two cycles of the Canadian Survey of Giving, Volunteering and Participating (2004 and 2007). Controlling for many individual factors, we find evidence that in 2004, volunteering was decreasing in population, income in equality, and shares of foreign-born residents. For 2007, there is no evidence that any of the community characteristics had significant effects, suggesting that Canada’s large communities were coping increasingly well with rising income inequality and birthplace diversity. [ABSTRACT FROM AUTHOR]

Considerable concern has recently been expressed worldwide about growing income inequality. Much of the discussion, though, has been in general terms and focused on the US experience. To understand whether and how Canada ought to respond to this development, we need to be clear on the facts. This paper documents Canadian patterns in income inequality and investigates the top 1 percent of earners-the group receiving the most attention. We summarize what is known about the causes of growing income inequality, including the role of gender wage differences. Finally, we outline policy options for reducing-or slowing the growth of-inequality. [ABSTRACT FROM AUTHOR]

Residents of Ontario aged 65 years and older are covered by a provincially funded prescription drug program. The aim of this paper is to assess the extent of inequity in prescription drug use for people eligible for Ontario Drug Benefit coverage, and to explore the different possible explanations for inequities. The analyses draw on the Canadian Community Health Survey from 2005, which is linked to pharmacy and Ontario Health Insurance Plan claims data. We model the number of therapeutically different prescription drugs and the total expenditures on medications on a set of health, demographic, and socioeconomic indicators, and we calculate the concentration index of income-related inequality in medicine use. The results show that low-income individuals who have enrolled in the reduced cost-sharing program on average use more medications than those with higher income, even after adjusting for a comprehensive set of health and demographic variables. While Ontario's public drug program appears to have ensured access to medications for low-income seniors, the results of this study raise concerns about the potential inappropriateness of medication use and point to a gap in drug policy in Ontario. [ABSTRACT FROM AUTHOR]

For a decade or so starting in the early 1990s, Canada's major income support programs underwent substantial reform. Meanwhile, the economy first lingered in a deep recession and then recovered with a period of strong growth. This paper focuses on how the distributional impact of Employment Insurance (EI) evolved during this period. We find that EI was strongly redistributive throughout the whole period with respect to the earnings of individuals, and somewhat less so for family income. But we also show that the distribution of benefits and contributions changed substantially over time, becoming less redistributive. Somewhat counter-intuitively, both the benefit and contribution sides of the program are shown to be redistributive, even though the contribution structure is regressive. These findings are relevant in the current context, as the economy struggles with a combination of high unemployment and fiscal pressures on government spending. [ABSTRACT FROM AUTHOR]

In this paper, we investigate the relationship between the substantial changes in tax and transfer programs and the movements in after-tax income inequality over the 1980s and 1990s. We show that in the 1980s, tax and transfer programs became more redistributive, offsetting substantial increases in market income inequality. In the 1990s, the tax and transfer system stopped undoing the increases in market income inequality, leading after-tax income inequality to rise. Even so, tax and transfer programs were more redistributive in 2000 than in the 1980s. Much of the changes occurred at the provincial level, with social assistance payments first increasing (in the late 1980s) then decreasing (in the late 1990s) and with surtaxes on high-income earners being first imposed and subsequently removed. [ABSTRACT FROM AUTHOR]

This paper looks at changes in hourly wages and hours worked per week of prime-age males in different skill groups (measured by earnings quintile) in the United States and Canada from 1981 to 1997. The analysis reveals that increases in hourly wage inequality are primarily responsible for increases in weekly earnings inequality in both countries. Increases in the dispersion of hours worked per week play a more important part in explaining the increase in earnings inequality in Canada than in the United States. High-skill workers experienced increases in earnings growth due to increases in hours and, at least for the US, increases in wages. In contrast, low-skill workers experienced declines in earnings growth due to decreases in wages and hours. This evidence is consistent with a skill-biased demand shock. In Canada a larger percentage of the reduction in earnings of low-skill workers is accounted for by declining hours. This evidence suggests a higher degree of downward wage rigidity in Canada than in the United States. [ABSTRACT FROM AUTHOR]