Income Inequality in Canada

Sarah Burkinshaw, Yaz Terajima and Carolyn A. Wilkins

No 2022-16, Discussion Papers from Bank of Canada

Abstract: Concerns over rising inequality have heightened in the years following the 2007–09 global financial crisis and, more recently, with the COVID-19 pandemic. This staff discussion paper reviews the historical facts regarding income inequality in Canada, comparing Canada with the United States and reviewing briefly what the literature says about the most likely drivers of the rise in inequality. Data show that income inequality in Canada increased substantially during the 1980s and first half of the 1990s but has been relatively stable over the past 25 years. This increase was felt mainly by low-income earners and younger people, while older people benefited from higher retirement income. Income inequality in the United States has been higher than in Canada for the last four decades, with the main differences observed at the high end of the income distribution. These facts give rise to a number of important questions for future research, including the role (if any) of monetary policy in driving changes in income inequality and that of the monetary policy framework and decisions in reflecting the observed inequality.

Keywords: Central bank research; Labour markets; Monetary and financial indicators (search for similar items in EconPapers)
JEL-codes: D31 D63 I24 I32 J31 J32 N32 (search for similar items in EconPapers)
Pages: 36 pages
Date: 2022-07
New Economics Papers: this item is included in nep-ban and nep-lma
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Citations: View citations in EconPapers (1)

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