A Comparison of Inequality and Living Standards in Canada and the United States Using an Expanded Measure of Economic Well-Being

Edward Wolff (), Ajit Zacharias, Thomas Masterson, Selcuk Eren, Andrew Sharpe and Elspeth Hazell

Economics Working Paper Archive from Levy Economics Institute

Abstract: We use the Levy Institute Measure of Economic Well-being (LIMEW), the most comprehensive income measure available to date, to compare economic well-being in Canada and the United States in the first decade of the 21st century. This study represents the first international comparison based on LIMEW, which differs from the standard measure of gross money income (MI) in that it includes noncash government transfers, public consumption, income from wealth, and household production, and nets out all personal taxes. We find that, relative to the United States, median equivalent LIMEW was 11 percent lower in Canada in 2000. By 2005, this gap had narrowed to 7 percent, while the difference in median equivalent MI was only 3 percent. Inequality was notably lower in Canada, with a Gini coefficient of 0.285 for equivalent LIMEW in 2005, compared to a US coefficient of 0.376-a gap that primarily reflects the greater importance of income from wealth in the States. However, the difference in Gini coefficients declined between 2000 and 2005. We also find that the elderly were better off relative to the nonelderly in the United States, but that high school graduates did better relative to college graduates in Canada.

Keywords: Well-Being; Living Standards; Inequality; Income; International Comparisons (search for similar items in EconPapers)
JEL-codes: D31 D63 P17 (search for similar items in EconPapers)
Date: 2012-01
New Economics Papers: this item is included in nep-hap, nep-ltv and nep-pke
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
http://www.levyinstitute.org/pubs/wp_703.pdf (application/pdf)

Related works:
Working Paper: A Comparison of Inequality and Living Standards in Canada and the United States Using an Expanded Measure of Economic Well-Being (2012)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:lev:wrkpap:wp_703

Access Statistics for this paper

More papers in Economics Working Paper Archive from Levy Economics Institute
Bibliographic data for series maintained by Elizabeth Dunn ( this e-mail address is bad, please contact ).