The prevalence and composition of asset poverty in Canada: 1999, 2005, and 2012

Abstract

A household is considered asset poor if its assets (financial assets or net worth, taken separately) are insufficient to maintain well‐being at a low‐income threshold for 3 months. We provide the first national‐level estimates of asset poverty for Canada, using the 1999, 2005, and 2012 cycles of the Survey of Financial Security, and juxtapose these estimates with income poverty. The analysis provides new insight into economic insecurity by showing that asset poverty rates are consistently two to three times higher than income poverty rates. In addition to the prevalence of asset poverty across socio‐demographic groups, we analyzed how the composition of the poor change over time. Age and geography shape the risk for asset poverty in distinct ways. We found that while education appears to play a comparable role in shaping both income poverty and asset poverty, immigration places Canadians at a relatively higher risk of income poverty but not asset poverty.Key Practitioner Message: • Practitioners ought to consider assets as well as income in assessing economic vulnerability; • Asset poverty levels are 2–3 times higher than income poverty levels; • Certain groups (e.g., immigrants) may be income poor but maintain sufficient assets.