Low income dynamics and determinants under different thresholds: New findings for Canada in 2000 and beyond
Authors: Zhe Ren and Kuan Xu
The existing studies on Canadian low income dynamics are based on either LAD or SLID data for the 1990s.This study extends the existing studies by using more recent SLID panel data for the period of 1999-2004 to address the following research questions: (1) Has poverty dynamics changed since the 1990s? (2) Do the patterns of low income dynamics differ when different low income thresholds such as LICO, LIM and MBM are adopted? (3) What are the prominent determinants that influence low income persistence after 2000? We find that the probabilities of being in the low income group for various durations over the period of 1999-2004 are lower than those in the 1990s. Men in general have lower probabilities to be in the low income group for various durations than women do. Different low income thresholds do not change the overall assessment of low income dynamics. That is, transitory low income is very much a life cycle phenomenon. For example, transitory low income is more prominent in certain age groups and unattached families. In other words, age and family composition play an important role. This study further confirms that while improvements are made for the total population and various subpopulations, low income persistence is still prominent among some high risk groups such as lone mothers, later immigrants, members of visible minority, people with less education and people with disability. While the above findings are robust using various low income thresholds, we further analyze the characteristics of the individuals in low income under one threshold but are excluded under another threshold. By examining these excluded individuals in low income, we are able to explain which low income threshold has the least exclusion and what are the characteristics of these excluded individuals. This analysis adds additional insight to the debate over the choice of a low income threshold.
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