The “middle class” is within easier reach for low income Canadian children, than it is for low income Americans

Upward mobility is more likely in Canada than in the United States, with the middle class within easier reach for Canadian children raised in low income families than for low income American children.

Canadian children raised by parents with incomes at the bottom 10 percent can expect to be earning enough as a young adults to place them much higher, above the 40th rung of a 100 rung income ladder, and significantly higher than their American counterparts. To reach a similar point on the income ladder an American child would have to have parents who ranked as high as the 39th percentile. Continue reading “The “middle class” is within easier reach for low income Canadian children, than it is for low income Americans”

If there is such a thing as the “Canadian Dream,” it would look very much like what Americans say is the “American Dream”

Public opinion polls suggest that Canadians and Americans share basic attitudes toward inequality and opportunity, and toward the underlying drivers of upward mobility. If there is such a thing as the “Canadian Dream,” it would look very much like what Americans say is the “American Dream.”

The Pew Charitable Trusts conducted a number of public opinion polls asking Americans what meaning they attach to the phrase “The American Dream,” and these have been adapted and conducted in Canada with remarkably similar responses.

In these polls respondents were asked to indicate the degree to which they agreed with a series of possible definitions of the American Dream. Sixty percent of American respondents ranked “being able to succeed regardless of family background” eight or higher on a ten point scale, while 59 percent of Canadians did so. The percentage indicating that the statement “Your children being financially better off financially than you” represents the American Dream was 64 percent in the United States, and 57 percent in Canada.

These two options relate most directly to social mobility as measured by social scientists, and the country differences in responses to them are not statistically significant. In fact, this was the case for the ratings given to all but one of the other ten options presented to these representative samples, Americans ranking “Owning your own business” more highly.

Source: Connolly, Corak, Haeck (2019) using data from Corak (2010).

Continue reading “If there is such a thing as the “Canadian Dream,” it would look very much like what Americans say is the “American Dream””

Poor children are twice as likely to grow up to be poor adults in some Canadian communities than in others

Intergenerational cycles of poverty vary across Canada, with low income children in some places facing a less than one-in-five chance of growing up to be poor adults, but in others the rate is more than double. The strong majority of children raised by lower income parents face a greater than one-in-four chance of growing up to be low income adults, and for many these odds were at least as high as one-in-three.

The chance that poverty will be passed on across the generations is 30 percent for the country as a whole, and the majority of children, 54 percent, live in 97 of a total of 266 municipalities where the chances of falling into an intergenerational cycle of low income are between 25 and 30 percent. A further 24 percent of poor live in a community where these chances are at least 0.30 but under 0.35.

There are 23 municipalities with a 40 percent or greater chance of an intergenerational cycle of low income. These communities are all small in population, and account for two percent of the total number of children.

There is a greater than 40% chance of intergenerational poverty In 23 Census Divisions

There are only seven of 266 communities in which the probability of a cycle of low income is less than 20 percent, representing only 1.6  percent of all children.

There is less than a 20% chance of intergenerational poverty in seven Census Divisions

The average parent income in these communities is below the national average. This raises the possibility that geographic mobility may be an important aspect of intergenerational mobility. The two Ontario communities listed in the above table are not areas in which there was significant economic growth, but the distances and costs associated with moving to nearby regions that were poles of growth—more specifically Toronto—were likely low.

 

[ The findings described in this post are drawn from my recently released research paper called “Divided Landscapes of Economic Opportunity: The Canadian Geography of Intergenerational Income Mobility.” You can learn more about this research, and download a copy of the paper and host of other information by reading the page devoted to this project at: MilesCorak.com/Equality-of-Opportunity . ]

I’ve been blogging for five years, and here are my 10 favourite posts

With the New Year approaching, permit me the opportunity to wish you and yours peace and prosperity.

The end of 2016 marks the fifth year of my blog, and I’m grateful to my students and readers for making it worthwhile, and particularly to those who have taken the time to reblog, comment on, or otherwise share one of my 148 posts.

Rather than offer you the usual top ten most popular posts, here are links to my favourite posts written at some point since I started blogging in November 2011. They are not necessarily the most viewed, but I like them because they best illustrate the principles motivating my writing:

  1. Write about what you know, and give readers the opportunity and resources to learn more.
  2. Focus on what is relevant—what people want to read, and what contributes to a constructive conversation about public policy.
  3. Do this in a professional way that uses the principles of economics.

Here are links to my ten favourite posts of the last five years.

Continue reading “I’ve been blogging for five years, and here are my 10 favourite posts”

How The Great Gatsby Curve got its name

Great Gatsby Curve

On January 4th, 2012 The New York Times published an article called “Harder for Americans to Rise from Lower Rungs.” I had spent a considerable amount of time during the New Year’s holidays talking with Jason DeParle about the comparative literature on intergenerational income mobility, and was pleased to see his article on the front page.

So pleased that I emailed Alan Krueger, the Princeton University economist who at the time was the Chairman of the Council of Economic Advisors, to draw his attention to it, though I don’t know why I imagined that Krueger and his staff in the White House would not be reading The Times.

That is how “The Great Gatsby Curve” was born.

Continue reading “How The Great Gatsby Curve got its name”

Sons of low-income parents are more likely to grow up to be poor than daughters

Children of low-income parents are more likely than not to grow up to be low-income adults. This is true for both boys and girls, but more so for boys.

the-intergenerational-cycle-of-low-income-for-boys-and-girls
(Click on the image to enlarge.)

This figure shows the rankings of children from low-income Canadian families, what fraction stand on each of the 100 rungs defined to equally divide the population across their adult income distribution. Their parents stood on exactly the bottom 5th rung of their income ladder, and the likelihood of them not advancing very much or even falling lower is clearly evident.

If adult incomes were completely independent of family income background, then we would expect 1 percent of these children to be on each of the 100 divisions of their income distribution. If this were the case children of low-ranking parents would be as likely to rise to middle incomes, or even to the very top, as they would be to stay on the same rung as their parents, or fall lower.

But in fact, this cohort of Canadians (those born in the 1960s) are much more likely to be the low-ranking adults of the next generation and are more likely to repeat the experiences of their parents.

This inter-generational cycle of low-income is more likely for boys. Although there is considerable upward rank mobility among these children, men raised by parents who were outranked by 95 percent of their counterparts are most likely to fall even lower, to be outranked by 99 percent of their cohort. Their chances of falling to the bottom 1 percent are more than 4 percent.

They are most likely to remain in the bottom 10 percent of the income distribution. Although an intergenerational cycle of low-income is also the most likely outcome for women, the chances are significantly lower, hovering in the neighbourhood of 2 percent for each of the rungs up to about the 10th.

[ This post is an edited excerpt from a forthcoming paper I have written called “‘Inequality is the root of social evil,’ or maybe not? Two stories about inequality and public policy”, which is published in the December 2016 issue of Canadian Public Policy. If you have any feedback please feel free to let me know in the comments section. ]