Definition and Measurement of Asset Poverty in Canada
23 Pages Posted: 14 Dec 2013
Date Written: December 12, 2013
In Canada, poverty policy and discourse focuses on annual estimates of low income. Assuming that assets, independent from income, represent an alternative view of well-being we introduce an asset-based measurement of poverty for Canada based on (1) financial assets and (2) net worth. A household is "asset poor" if it does not own sufficient assets to survive at the low-income cutoff for three months. Data from the 1999 and 2005 cycles of the Survey of Financial Security suggest asset poverty rates were approximately two to four times higher than the corresponding low-income rates. We show for the first time that, proportionately, households with female lone parents, renters and younger persons were overrepresented among the asset poor. We demonstrate that 14% of Canadians were joint low income and financial asset poor in 2005. The relatively high asset poverty rates suggests a need for anti-poverty policies to better promote financial security.
Keywords: poverty, assets, wealth, asset poverty, Canada
JEL Classification: I32, D14, D31
Suggested Citation: Suggested Citation