February 12, 2021
Canada’s population is aging and family size is shrinking, intergenerational transfers of wealth are at their highest rate and economic inequality is growing. As such, it is important to understand how the ability to accumulated wealth and acquire financial assets provides a significant advantage from one generation to the next.
In a new study by Statistics Canada, researchers provided new evidence showing that your income status and likelihood of economic mobility in adulthood is correlated with your parents income at an earlier point in time, and that this connection has grown stronger across generations in every province in Canada.
In other words, intergenerational income mobility has steadily decreased while income inequality has steadily increased.
- Children born in the bottom 20% of families in terms of income are “less likely to exit the bottom income quintile themselves and less likely to transition into the middle class.”
- Atlantic provinces were found to have “the most equal opportunities for children” for intergenerational income mobility.
- Manitoba was found to have the lowest intergenerational income mobility among the 10 provinces.
“This study provides the evidence backing up what many people have been feeling for a while … namely that over the past few generations your parents’ income status has increasingly impacted your economic opportunities in adulthood,” said Vanier Institute CEO Nora Spinks.