Trends in Growth, Equity and Opportunity: Canada Conference: Inclusive Prosperity: Recoupling Growth, Equity and Social Integration Queen’s University August 20, 2019 Mike Veall ([email protected]) Economics, McMaster University productivity.partnership.ca Acknowledgements: Zvez Todorov, Sara Kamala Anaraki, Anthony Hong (RAs), SSHRC (Productivity Partnership), Statistics Canada and Brian Murphy. Opinions are mine. 1
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Trends in Growth, Equity and Opportunity: Canada · After peaks in 1920s and 30s, top shares fall from WWII to late 70s. 26 0 2 4 6 8 10 12 14 16 18 20 1920 1940 1960 1980 2000 2020
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Trends in Growth, Equity and Opportunity: Canada
Conference: Inclusive Prosperity: Recoupling Growth, Equity and Social Integration
Acknowledgements: Zvez Todorov, Sara Kamala Anaraki, Anthony Hong (RAs), SSHRC (Productivity Partnership), Statistics Canada and Brian Murphy. Opinions are mine.
Main points:• Rise in Canadian income inequality a top-end
phenomenon during the 1980s and 1990s• Not sure if rise continues• Male but becoming somewhat less male• Important regional differences; cause?• Other types of inequality (wealth, health,
opportunity)• A mixed review on Canadian tax policy
responses to the income inequality rise
2
3
0%
5%
10%
15%
20%
25%
30%
35%
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
Pre-Tax/Transfer Income Shares by Decile, Canada, 1982 to 2017
Statistics Canada: Canadian Income Survey
Top Decile
4
0%
5%
10%
15%
20%
25%
30%
35%19
8219
8419
8619
8819
9019
9219
9419
9619
9820
0020
0220
0420
0620
0820
1020
1220
1420
16
Pre-Tax/Transfer Income Shares by Decile, Canada, 1982 to 2017
Statistics Canada: Canadian Income Survey
Top DecileIncome share ≈ 0 for lowest decile
5
0%
5%
10%
15%
20%
25%
30%
35%19
8219
8419
8619
8819
9019
9219
9419
9619
9820
0020
0220
0420
0620
0820
1020
1220
1420
16
Pre-Tax/Transfer Income Shares by Decile, Canada, 1982 to 2017
Statistics Canada: Canadian Income Survey
Little change, entire period, lower 9 deciles
6
0%
5%
10%
15%
20%
25%
30%
35%
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
Pre-Tax/Transfer Income Shares by Decile, Canada, 1982 to 2017
Statistics Canada: Canadian Income Survey
Increase, top decile, late 1980s + 1990s
7
0%
5%
10%
15%
20%
25%
30%
35%
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
Pre-Tax/Transfer Income Shares by Decile, Canada, 1982 to 2017
Statistics Canada: Canadian Income Survey
Top decile share flattens, mid-2000s on
8
0%
5%
10%
15%
20%
25%
30%
35%19
8219
8419
8619
8819
9019
9219
9419
9619
9820
0020
0220
0420
0620
0820
1020
1220
1420
16
After-Tax/Transfer Income Shares by Decile, Canada, 1982 to 2017
Statistics Canada: Canadian Income Survey
Top Decile
9
0%
5%
10%
15%
20%
25%
30%
35%19
8219
8419
8619
8819
9019
9219
9419
9619
9820
0020
0220
0420
0620
0820
1020
1220
1420
16
After Tax/Transfer Income Shares by Decile, Canada, 1982 to 2017
Statistics Canada: Canadian Income Survey
Top DecileLowest decile up to 3% income share
10
0%
5%
10%
15%
20%
25%
30%
35%19
8219
8419
8619
8819
9019
9219
9419
9619
9820
0020
0220
0420
0620
0820
1020
1220
1420
16
After Tax/Transfer Income Shares by Decile, Canada, 1982 to 2017
Statistics Canada: Canadian Income Survey
Top DecileLittle change in lower 9 deciles
11
0%
5%
10%
15%
20%
25%
30%
35%19
8219
8419
8619
8819
9019
9219
9419
9619
9820
0020
0220
0420
0620
0820
1020
1220
1420
16
After Tax/Transfer Income Shares by Decile, Canada, 1982 to 2017
Statistics Canada: Canadian Income Survey
Slower increase for top decile
But switching from survey data to tax data (following Atkinson)…
1. Bigger increases at the top end2. Increases concentrated in the top 1% (and
the top 0.1% and the top 0.01%)e.g. 1982 to 2007, income after-tax/transfers:- top 10% (excluding the top 1%) share ↑ from
21.5% to 22.5%, 1 percentage point- top 1% share ↑ from 6.3% to 11.7%, 5.4
percentage points
12
Top Pre-tax/transfer incomesCanada, taxfiler basis, 2014
(2015, an up year, 2016 a down year)Threshold Average