Garnett Picot

Why Have Poorer Neighbourhoods Stagnated Economically while the Richer Have Flourished? Neighbourhood Income Inequality in Canadian Cities

Higher-income neighbourhoods in Canada’s eight largest cities flourished economically during the past quarter-century, while lower-income communities stagnated. This paper identifies some of the underlying processes that led to this outcome. Increasing family income inequality drove much of the rise in neighbourhood inequality. Increased spatial economic segregation, the increasing tendency of ‘like to live nearby like’, also played a role. It is shown that these changes originated in the labour market. Changes in investment, pension income and government transfers played a very minor role. Yet it was not unemployment that differentiated the richer from poorer neighbourhoods. Rather, it was the type of job found, particularly the annual earnings generated. The end result has been little improvement in economic resources in poor neighbourhoods during a period of substantial economic growth, and a rise in neighbourhood income inequality.

Low-income Intensity During the 1990s: The Role of Economic Growth, Employment Earnings and Social Transfers

This paper assesses the role played by changes in economic growth, employment earnings, and government transfers in the patterns of low-income intensity in Canada during the 1980s and the 1990s. We find that lowincome intensity was higher in most provinces during the 1990s than during the 1980s (comparing comparable positions in the business cycle). During the 1990s changes in government transfers did not offset the fall in employment earnings among lower-income families, as they did during the 1980s, resulting in an increase in low-income intensity. Whether or not the relationship between economic growth and low-income intensity weakened in any kind of permanent way during the 1990s as compared to the 1980s is unclear from this analysis.