People earning the lowest incomes in the country can easily move up to the highest levels over time, according to a Fraser Institute study released today.
The report measures income mobility – the movement between income levels – and finds that it is often ignored in the debate about income inequality in Canada.
“Canada is not a caste society where people are consigned to a single income group for their entire lives,” said Charles Lammam, associate director for the public policy think-tank. “People move up and down the income ladder over the course of their lives.”
Lammam said the income inequality debate typically compares high and low-income earner groups at specific points in time, explaining this produces a distorted picture of the situation.
“Most Canadians start off with a relatively low income because they are young, new to the workforce and lack work and life experience,” he said, saying their income levels then increase as they acquire education and job-related skills.
Highlights of the study, which looked at changes in income by dividing earners into five different groups based on their initial income between 1990 and 2009, include:
- 87% of those starting in the lowest income group moved to a higher level;
- 21% of those in the bottom group ended up in the highest income group; and
- 36% of earners who started in the top tier moved to a lower income category.
The Fraser Institute said the study, Measuring Income Mobility in Canada, was compiled using data requested from Statistics Canada.
