We’re poorer than Americans but we have a better chance of moving up. Or down
Interesting question: If you translated our incomes into U.S. dollars using exchange rates that accurately reflected cross-border differences in purchasing power, how many Canadians would make it into the top fifth of the U.S. income distribution? Answer: just 5.2 per cent of us.
Now, this being both economics and statistics, I’ve immediately got to qualify. These numbers fall out of a new study by Miles Corak of City University of New York and Marie Connolly and Catherine Haeck of the Université du Québec à Montréal on the intergenerational transmission of income inequality in Canada and the U.S.
How rich or poor Canadians are compared to Americans isn’t the study’s main point, but still: It’s hard not to be taken aback by such a stark demonstration of how far ahead the top echelon of Americans is. On the other hand, money isn’t everything. If lower Canadian incomes were offset by greater social mobility or less inequality, maybe it would be worth it.
How about rags to riches? That is, kids from bottom-quintile parents ending up in the top quintile? The chance of that is just 7.2 per cent in the U.S. — one in 14 basically, which isn’t very good. By contrast, in Canada it’s 11.2 per cent — one in nine, so: better, but not really great, either.
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