Low-Income Dynamics in Canadian Society: Debates on Low-Income Measures and New Empirical Evidence

Abstract

In the existing research on poverty/low income, there are emerging initiatives to use multiple thresholds of low income instead of a single threshold and to analyze persistent low income over several years instead of low income in a single year. Although most recent studies have identified low-income incidences for multiple years (at least one year, at least four years, or at least six years) associated with multiple low-income thresholds, they unintentionally bury short-run low-income spells (for one to three years) in longer low-income spells (for four to six years). In this article, we review the debates on measures of low income and attempt to differentiate the short-run low-income spells clearly from their chronic counterparts. We further identify the characteristics of Canadians who are trapped under these two types of low-income spells. Using our approach and the 1999–2007 Canadian Survey of Labour and Income Dynamics (SLID) data, we have found that approximately 73% of low-income Canadians are in short-run low income, while about 27% are in chronic low income. Short-run low income is generally associated with life cycle transitions, while chronic low income is generally associated with certain high-risk groups. These findings are fairly robust across various thresholds of low income.