StatCan study shows it’s getting harder to become richer

Canadians are increasingly limited to the economic group they were born into according to Statistics Canada study

StatCan study shows it’s getting harder to become richer
Steve Randall

Getting rich for those who are not born into money is an increasingly tough journey according to a new study from Statistics Canada.

Using tax records, the analysis aimed to consider the likelihood that children born into low, middle, or top tiers of income distribution are still there many years later.

The study identified five cohorts born between 1963 to 1985, observing them as teenagers living with their parents and then in their late 20s and 30s.

It found that, as they moved through the cohorts, the relationship between their family economic position in their teens and their own as young adults, became stronger.

As an example, those born into families in the lowest 20% of income distribution, were 27% more likely to still be in the lowest group later in life if they were born between 1963 and 1966. For those born between 1982 and 1985, this probability increased to almost 33%.

Richer stay rich

At the other end of the scale, there has also been a slight shift.

Those born into the top 20% of income distribution in 1982 is as likely as those born into this group in 1963 to remain in the higher band later in life. But they also had a 13 percentage point decrease in the probability that they will slip into a lower income group.

Statistics Canada’s analysis shows that income inequality and mobility increased over time.