Social Transfers, Earnings and Low-Income Intensity Among Canadian Children, 1981-96: Highlighting Recent Development in Low-Income Measurement

Statistics Canada Working Paper No. 144

34 Pages Posted: 3 Aug 2000

See all articles by John Myles

John Myles

Florida State University - Department of Sociology

Garnett Picot

Statistics Canada

Date Written: March 2000

Abstract

In this paper, we revisit trends in low-income among Canadian children by taking advantage of recent developments in the measurement of low-income intensity. We focus in particular on the Sen-Shorrocks-Thon (SST) index and its elaboration by Osberg and Xu. Low-income intensity declined in the 1980s but rose in the 1990s. Declining earnings put upward pressure on low-income levels over much of the period. Higher transfers more than offset this pressure in the 1980s and continued to absorb a substantial share of the increase through 1993. In contrast, the rise in low-income intensity after 1993 reflected reductions in UI and social assistance benefits that were not offset by increased employment earnings, at least to 1996 the latest year used in this paper.

A major aim of the paper is methodological. We contrast results using the SST index with results produced by the more familiar low-income rate, the usual measure for indexing low-income trends. The low-income rate is embedded in the SST index, but unlike the index, the rate incorporates only partial information on the distribution of low-income. Consequently, the low-income rate is generally unable to detect the changes we describe and this is true irrespective of the choice of low-income cut-off. Compared to the low-income intensity measure, the rate is also relatively insensitive to changes in transfer payments and employment earnings.

Keywords: Children, Earnings, Families with Children, Government Transfer Payments, Income, Lone Parent Families, Low Income, Low Income Cutoffs, Models, Poverty, Salaries And Wages, Social Assistance, Social Security, Statistical Methods, Two Parent Families, Wage Inequality

JEL Classification: H59, J13

Suggested Citation

Myles, John and Picot, Garnett, Social Transfers, Earnings and Low-Income Intensity Among Canadian Children, 1981-96: Highlighting Recent Development in Low-Income Measurement (March 2000). Statistics Canada Working Paper No. 144, Available at SSRN: https://ssrn.com/abstract=229553 or http://dx.doi.org/10.2139/ssrn.229553

John Myles (Contact Author)

Florida State University - Department of Sociology ( email )

Tallahassee, FL 32306
United States
850-644-5418 (Phone)

Garnett Picot

Statistics Canada ( email )

Ottawa, Ontario
Canada
613-951-8214 (Phone)
613-951-5403 (Fax)

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