Canadian inequality over the last 40 years: common and contrary variations on universal themes

Abstract

AbstractThe Gini coefficient for disposable income for Canada in 2019 was approximately the same level it was at in 1995. Underlying this flat recent long‐term pattern is an increase in the level of market earnings inequality in the 1980s and 1990s that Canada shared with other countries followed by a continuing period of flatness in that measure as well. This trend interacted with changes in policy that have, at times, offset earnings inequality trends and at other times exacerbated them. In this paper, we describe these trends and the combination of market and policy forces that drove them. We conclude that explanations rooted in ongoing technology or globalisation forces are less relevant than explanations based on deeper structural changes in the labour market. Those changes affecting earnings inequality were ultimately fully offset by changes in the tax and transfer system as well as labour market policies such as the minimum wage.