Growing Unequal? Changes in the Distribution of Earnings across Canadian Cities

Abstract

This paper investigates changes in the distribution of earnings across 87 metropolitan areas in Canada. It does so using micro data taken from the 20 per cent long-form sample of the census for the years 1996, 2001 and 2006. Results point to overall increases in urban inequality and to greater heterogeneity in inequality across the urban hierarchy, with larger cities growing particularly unequal over time. Cross-sectional and panel regression models suggest that city size, unemployment, deindustrialisation and the percentage of a city’s population composed of visible minorities contribute to increased inequality. In contrast, a city’s level of economic development has a mitigating effect on inequality, although this effect appears to fade away over time. The effects of changes in a city’s age, education and gender profiles on inequality are mixed.

Rising inequality in Canada: A regional perspective

“…The basic argument is that increasing size and/or population density leads to greater potential for differences in productivity and earnings across regions (Baum-Snow & Pavan, 2012;Ciccone & Hall, 1996;Garofalo & Fogarty, 1979;Long, Rasmussen, & Haworth, 1977;Yorukoglu, 2002). Bolton and Breau (2012) find evidence of a positive city size effect on inequality in Canada. We expect to see a similar relationship in terms of regional patterns of inequality.…”

“…While they provide a valuable descriptive account of trends in urban inequality, like Bourne (1993), they do not detail the causes of inequality. Mitchell and Soroka (1993), Soroka (1999) and more recently Bolton and Breau (2012) and Breau, Kogler, and Bolton (2014) have investigated urban patterns of inequality using multivariate modeling frameworks that control for a multitude of explanatory factors. Myles, Picot, and Pyper (2000) and Heisz and McLeod (2004) provide an overview of neighborhood income inequality across Canada's largest cities and argue that the relative stability in national-level inequality in the 1980s and early 1990s conceals important variation and changes in the distribution of income across neighborhoods.…”

Inclusive growth? The relationship between economic growth and poverty in British cities

“…In one of the few UK studies on this topic, McCulloch (2003) finds that local employment growth is associated with a higher probability of exiting poverty. At the same time, there has also been increasing concern about growing inequality nationally (Piketty, 2014) and in cities with strong economies (Bolton & Breau, 2011;Lupton et al, 2013;van der Waal & Burgers, 2009).…”

The Geography of Wage Inequality in British Cities

“…However, British cities lack the most powerful levers to address and alleviate inequality through the tax and benefits system. A growing body of literature considers the determinants of urban inequality, with studies focusing on Canada (BOLTON and BREAU, 2012;BREAU et al 2014), the United States (GLAESER et al 2009;FLORIDA and MELLANDER, 2014) and Swedish local labour markets (KORPI, 2008). In the UK, work has considered employment polarisation (JONES and GREEN, 2009) and wage inequality (DICKEY, 2001;TAYLOR, 2006;DICKEY, 2007;STEWART, 2011), but only at a regional level.…”