Demographic change and regional convergence in Canada

We examine the role of demographic change for regional convergence in living standards in Canada. Due to economies of scale within a family, decreasing household size has an impact on convergence in living standards, while per capita income convergence remains unaffected. We find that, by relying on per capita income, the dispersion of living standards between Canadian regions is overestimated prior to the 1990s and underestimated thereafter. As a consequence, relying on income per capita results in overestimating the speed of convergence in living standards.