Family Background and Economic Mobility in the United States and Canada

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Research Briefs

Canadian kids more likely to earn more than parents

A new study by economists Miles Corak, Lori Curtis, and Shelley Phipps shows that Canadian children are more likely than American children to have a better economic standing than their parents.

Canadian children are about three times more economically mobile than those in the United States, says the study, which looked at samples of American and Canadian populations.

This means that family background factors such as race, immigrant status and parents’ income play less of a role in determining a child’s economic future in Canada than it does in the United States.

The study notes that the gap between Canadians and Americans widens at the extreme ends, indicating that it is easier for poorer Canadian children to improve their economic standing when they reach adulthood.

Part of the reason for this difference is that Canadian policies surrounding tax benefits and parental leave make it easier for parents to raise children when they are young. Canadian families work fewer hours than American ones, on average, and parents care for their own children more often instead of relying on day care or other family members.

Additionally, tax benefits for children distribute wealth more evenly in Canada, keeping those living in low income situations closer to the threshold than in the United States.

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Related Briefs:

An International Comparison of Lifetime Inequality: How Continental Europe Resembles North America

 

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