To What Extent Are Canadians Exposed to Low Income?

In this paper, we investigate the extent to which Canadians were exposed to low income during the 1993-1996 period. Our main findings are the following. First, while 1 in 10 Canadians live in families with low income in a given year, as many as 1 in 5 are exposed to at least one year of low income during a 4-year interval. Second, 1 in 20 Canadians are exposed to low income for 4 consecutive years. Third, 40% to 60% of individuals who fall into low income in a given year will no longer have low income the following year. Fourth, some spells of low income last a long time: of all spells started in 1994, 30% lasted 3 years or more. Fifth, Canadians who are the most susceptible to low income tend to be young; to have little education; to be students and to live as unattached individuals or in lone-parent families. As well, Canadians facing disabilities that entail work limitations, those who are members of visible minorities (when considering the exposure to 4 years of low income) or who have immigrated in or after 1977 tend to experience low income. Sixth, high probabilities of being exposed to low income do not necessarily imply high income gaps, that is, the average income of those in low income may be quite close to the low income cut-off. As a result, a complete understanding of the extent to which Canadians are exposed to low income requires an analysis of both the probabilities of being exposed and the income gaps while being exposed.