 |
CHILD POVERTY PROFILE 1998
| TABLE OF CONTENTS | Français |
HIGHLIGHTS
3.0 NUMBER AND AGE OF CHILDREN
4.0 AGE OF THE MAJOR INCOME EARNER
5.0 EDUCATION OF THE MAJOR INCOME EARNER
6.0 NUMBER OF EARNERS AND LABOUR FORCE ACTIVITY
8.3 Average Income of the Poor Compared to the Non-Poor
8.5 Income Categories Based on Percentage of the Poverty Line
9.1 Major Source of Family Income
9.3 Earnings, Welfare and Employment Insurance
APPENDIX B: COMPARISON TO OTHER NATIONAL COUNCIL OF WELFARE PUBLICATIONS
THE NATIONAL COUNCIL OF WELFARE
TOP
LIST OF TABLES
Table 1.1, Poverty Trends for Children Under 18 Years Of Age, 1980-1998
Table 1.2, Poverty Trends for Two-Parent Families, 1980-1998
Table 1.3, Poverty Trends for Single-Parent Mothers, 1980-1998
Table 1.4, Poverty Trends for Single-Parent Fathers, 1980-1998
Table 1.5, Poverty Rates (%) for Children Under 18 Years of Age by Province, 1980-1998
Table 5.1, Distribution of Children by Highest Level of Education of Family Major Income Earner, 1998
Table 5.2, Poverty Rate For Families With Children by Highest Level of Education of Family Major Income Earner, 1998
Table 6.1, Child Poverty Rates by Number of Earners in Family, 1998
Table 6.2, Child Poverty Rates by Labour Force Activity of Family Major Income Earner, 1998
Table 8.1, Average Before-Tax Income by Family Type for Poor and Non-Poor Families, 1980-1998
Table 8.2, Average Incomes of Families, 1998
Table 8.3, Number And Distribution of Families by Income Categories Based on Percentage of The Poverty Line, 1998
Table 8.4, Number And Distribution of Poor Families With Income Less Than 50% of The Poverty Line, by Age Of Family Major Income Earner, 1998
Table 9.1, Transfer Payments to Families with Children, 1998
Table 9.2, Sources of Income for Poor Families with Children, 1998
Table 9.3, Incomes of Poor Families with Children by Primary Sources of Income, 1998
Table 9.4, Number of Poor Families with Children by Primary Sources of Income, 1998
Table 10.1, Percentage Distribution of People with Low Income by Family Type, 1993-1998
Table A.1, Statistics Canada’s Low Income Before Tax Cutoffs
LIST OF FIGURES
Figure 1.1, Child Poverty Rate in Canada, 1980-1998
Figure 1.2, Family Poverty Rates in Canada, 1980-1998
Figure 2.1, Distribution of Children in Canada by Family Type, 1998
Figure 2.2, Number of Poor Children by Selected Family Type, 1980 & 1998
Figure 3.1, Poverty Rates for Two-Parent Families by Number and Age of Children in Family, 1998
Figure 3.2, Poverty Rates for Single-Parent Mothers by Number and Age of Children in Family, 1998
Figure 4.1, Distribution of Children by Age of Major Income Earner, 1998
Figure 5.1, Distribution of Children by Highest Level of Education of Major Income Earner, 1998
Figure 5.2, Distribution of Poor Two-Parent Families by Highest Level of Education of Major Income Earner, 1998
Figure 5.3, Distribution of Poor Single-Parent Mothers by Highest Level of Education of Major Income Earner, 1998
Figure 6.1, Child Poverty Rates by Number of Earners in Family, 1998
Figure 6.2, Distribution of Children by Labour Force Activity of Major Income Earner, 1998
Figure 8.1, Before-Tax Income by Family Type, 1980-1998
Figure 8.2, Income Share (%) by Deciles for Families with Children
Figure 8.3, Percentage Change in Average Before-Tax Income by Deciles for Families with Children, 1994-1998
Figure 8.4, Average Before-Tax Income, 1998
Figure 8.5, Poverty Gap for Poor Single-Parent Mothers by Number of Earners, 1998
Figure 8.6, Poverty Gap for Poor Two-Parent Families by Number of Earners, 1998
Figure 8.7, Distribution of Poor Families by Income Categories as a Percentage of Poverty Line, 1998
Figure 9.1, Distribution of Children by Major Source of Family Income, 1998
Figure 9.2, Average Government Transfers, 1998
Figure 9.3, Government Transfers as a Percentage of Total Income, 1998
Figure 9.4, Average Income of Poor Families with Children for Selected Sources of Income, 1998
Figure 9.5, Distribution of Poor Families with Children for Selected Sources of Income, 1998
Figure 10.1, Persistence of Poverty for Children in Canada, 1993-1998
Figure 10.2, Number of Years in Poverty of Children in Canada, by Age of Child, 1993-1998
Figure 10.3, Distribution of Persons by Family Type and Number of Years in Poverty, 1993-1998
Figure A.1, The Before-Tax Income Decile Ladder for Families with Children, 1998
Child poverty rates declined from 1996 to 1998. The rate of 19.2 percent in 1998 was the lowest since 1992. However, this seven-year low still means that close to one in five children lived in poverty.
Single-parent mothers continue to have extremely high poverty rates. In 1998 the poverty rate for this type of family was 52.9 percent. The poverty rate for two-parent families was much lower at 10.7 percent.
Just over half of poor children lived in two-parent families compared to 81 percent of non-poor children.
Forty percent of poor children lived with single-parent mothers compared to 7.3 percent of non-poor children. Less than three percent of poor children lived with single-parent fathers. A similar proportion, 2.1 percent, of non-poor children lived with single-parent fathers.
Poverty rates for families tend to decrease once the youngest child reaches school age. For example, the poverty rate for two-parent families with one child less than seven years old was 10.4 percent in 1998. If the child was between seven and 17 years old, the poverty rate dropped to 7.4 percent.
Poverty rates for families tend to increase with the number of children in the family. For example, the poverty rate for single-parent mothers with one child less than seven years old was 61.3 percent in 1998. If there were two children less than seven years old, the poverty rate jumped to 82.6 percent.
Poor children are more likely to have younger parents. In 1998, close to three-quarters of poor children lived in families where the major income earner was less than 35 years old compared to 58.3 percent of non-poor children.
Close to one-third of poor children in 1998 lived in families where the major income earner had less than a high school diploma. Only four percent of poor children lived in a family where the major income earner had a university degree.
Higher levels of education do not necessarily make families immune to poverty. In 1998, almost half of the major income earners in poor two-parent families and 53.9 percent of poor single-parent mothers had actually gone beyond high school.
Less than a quarter of poor children lived in families where the major income earner worked full-year, full-time in 1998. Three-quarters of non-poor children lived in this type of family.
Almost a third of poor children lived in families where the major income earner did not work at all during the year in 1998.
Although a greater proportion of poor children lived in families where the major income earner did not work, the perception that poor children live in families where the adults do not work at all needs to be somewhat tempered. Fully half of poor children lived in families where the major income earner had worked part, if not all, of the year in 1998.
Aboriginal children have extremely high poverty rates. In 1995, three out of five (60;percent) Aboriginal children under six years old lived in poor families. The poverty rate for all children was much lower at one in four (25 percent). Among Aboriginal children six to 14 years old, the poverty rate was lower at 48 percent, but was still more than double the national rate of 22 percent.
Between 1994 and 1998 the average incomes of all families with children increased. However, the biggest increases went to the wealthiest families while the poorest families saw smaller increases.
Depth of poverty continues to be a serious concern. The average income of poor families with children was about $9,000 below the poverty line in 1998.
In 1998, there were more single-parent mothers living in deep poverty (less than half of the poverty line) than two-parent families.
Poor two-parent families were more likely to be close to the poverty line. More than half of poor two-parent families had incomes within 25 percent of the poverty line in 1998 compared to only a third of poor single-parent mothers.
More than half of poor children lived in families where the major source of income was government transfers.
Poor families that received welfare and had no earnings or Employment Insurance benefits had extremely low average incomes. The average income in 1998 for single-parent mothers was $13,395 and the average for two-parent families was $19,436.
Just over a third (34 percent) of children in Canada experienced poverty for at least one year between 1993 and 1998. Slightly more than 7 percent lived in poverty for the entire six years.
Children less than six years old were more likely than older children to have experienced poverty between 1993 and 1998. They were also more likely to have lived in poverty for the entire six years.
People living in single-parent families were exposed to poverty much more often than people in two-parent families between 1993 and 1998.
The focus of this paper is children under 18 years of age. Data is presented for both children and families with children. As 95 percent of all children in Canada lived in either non-elderly two-parent families or in non-elderly single-parent mother families in 1998, analysis at the family level will focus on these two types of families.
A family is defined as a group of individuals sharing a common dwelling unit and related by blood, marriage or adoption. The definition includes couples living in common-law relationships.
A non-elderly family is defined as a family in which the major income earner is less than 65 years old. Families referred to in this report are non-elderly families unless otherwise stated.
An unattached child is defined as a child living alone or in households where they are not related by blood, marriage or adoption to other household members.
From 1980 to 1995, Statistics Canada used the concept "head of a family." In families consisting of a married or common-law couple, the man was considered to be the "head." In lone-parent families with unmarried children, the parent was the "head." In other types of families, the "head" was usually the family member who was mainly responsible for the maintenance of the family or was the eldest in the family.
Starting in 1996 with the switch to the Survey of Labour and Income Dynamics as the source of low income data, the concept "head of a family" has been replaced with "major income earner". For each family, the major income earner is the person with the highest income before tax.
A poor or low-income family has an income below the poverty line, while a "non-poor" family has an income above the poverty line.
Poverty rates compare the number of poor persons or families in a particular category to all the persons or families in the same category. For example, there were an estimated 1,353,000 poor children in 1998. The estimated total number of children was 7,052,000. The poverty rate was 1,353,000 divided by 7,052,000 or 19.2 percent.
Sometimes, the terms incidence of poverty or risk of poverty are used instead of the poverty rate. The meaning of all three terms is the same.
Income refers to money income reported by all family members 16 years or older. Income includes gross wages and salaries, net income from self-employment, investment income, government transfer payments, pensions, and miscellaneous income (scholarships and child support payments, for example).
Government transfer payments include Employment Insurance, Old Age Security, Canada and Quebec Pension Plans, Guaranteed Income Supplements, Spouse’s Allowance, Child Tax Benefit, other child credits or allowances, welfare from provincial and municipal programs, workers’ compensation benefits, GST/HST credits, provincial and territorial tax credits and any other government transfers.
Some sections of this report refer to earnings rather than income. Earnings means gross wages and salaries and net income from self-employment.
Child poverty in Canada is a subject that is much discussed and debated. The National Council of Welfare itself has reported extensively on the negative effect poverty has on children and their families. Good health and development during childhood are among the most important factors in making sure that people grow up healthy enough to learn, find work, raise families and participate fully in society for all their lives. Children in low-income families have higher risks of poor health and poor developmental outcomes than do children in middle-income and high-income families.
Child Poverty Profile 1998 is a special report in the National Council of Welfare’s annual series Poverty Profile. The report is based on data collected by Statistics Canada. Like the Poverty Profile publications, the report presents a statistical profile of poverty in Canada rather than a blueprint for eliminating poverty. The National Council of Welfare has published many other reports over the years that recommend actions for combating child poverty. Some of these recommendations are summarized in the conclusion.
We hope this report will lead to a better understanding of child poverty and encourage Canadians to think about how governments and Canadians themselves can use the tools at their disposal to ensure that every child has a fair chance to share in Canada’s wealth and opportunities.
The report examines child poverty by looking at children specifically and by looking at their families. Children are not poor on their own. They are poor because their families are poor.
We start by examining poverty trends from 1980 to 1998 for children and their families. This is followed by snapshots of poverty in 1998 for many indicators such as family type, number and age of children in a family and age, education and work activity of parents. There is also a section on Aboriginal children.
It is one thing to measure the incidence of poverty and another to measure its severity. Data is presented on the depth of poverty of children’s families using indicators such as average dollars below the poverty line and family incomes as a percentage of the poverty line. There is a section on the sources of income of poor children’s families. And finally, information is presented on the duration of poverty.
In this report, the children described are zero to seventeen years old. Family data focuses on two-parent families and single-parent families that are non-elderly, that is, the family’s major income earner is less than 65 years old.
The 1998 income data were published by Statistics Canada under the title Income in Canada, 1998. Statistics Canada also provided custom tabulations to the National Council of Welfare. The analysis and interpretation of the data, however, is the responsibility of the National Council of Welfare, not Statistics Canada. Readers who wish to compare information presented in this report to other National Council of Welfare publications are advised to read the description of methodology presented in the appendix at the end of the report.
1.1 National Trends
Overall, child poverty rates tend to rise in economic downturns and fall during economic growth. As shown in Figure 1.1, in the 1980s, the child poverty rate rose with the recession of 1981-1982, peaking in 1984 at 21 percent and then declining for the rest of the 1980s.
The recession of 1990-1991 drove child poverty up once again. In spite of the economic recovery following the recession, the rate continued to rise until 1996 when it peaked at 21.6;percent. The modest decline that began in 1997 continued in 1998 as the child poverty rate fell to 19.2 percent.
The number of poor children also peaked in 1996 at 1,533,000. As the poverty rate declined in the following years, so did the number of poor children. In 1998, there were 1,353,000 poor children in Canada. The number of poor children has not been lower than this since 1992.(Table 1.1)
When we look at poverty rates for families that have children, the importance of a second wage earner or potential second wage earner and the importance of two adults to support one another with family responsibilities becomes obvious. The poverty rates for families headed by single-parent mothers have consistently been five to six times higher on average than the poverty rates for two-parent families as we can see in Figure 1.2.
The poverty rate of two-parent families rose and fell with the overall state of the economy from 1980 through the early 1990s. Like child poverty, the rate continued to increase in the 1990s, only starting to decline in 1997. In 1998, the poverty rate of two-parent families was 10.7 percent, the lowest level since 1992. In 1998, there were 327,000 poor two-parent families. The number of poor two-parent families peaked in 1996 at 421,000. (Table 1.2)
Poverty rates for families headed by single-parent mothers have remained extremely high over the past two decades. Between 1980 and 1998, the poverty rate has fluctuated between 53 and 62 percent. Even though the poverty rate in 1998 is at a record low, more than half (52.9 percent) of these families lived in poverty. In 1998, there were 307,000 poor single-parent mothers. The number of poor single-parent mothers was highest in 1993 at 360,000. (Tables 1.3)
The trends for single-parent fathers are a bit more difficult to follow as their numbers are often too small for statistically reliable data to be collected about them. Single-parent fathers have consistently had poverty rates about two to three times higher than two-parent families. However, their poverty rates have always been drastically lower than those of single-parent mothers. For example, in 1998 the poverty rate for single-parent fathers was 23.1 percent compared to 52.9 percent for single-parent mothers. Due to the small number of single-parent fathers in Canada, the number of poor single-parent fathers is much smaller than the number of poor two-parent families in spite of their higher poverty rate. In 1998 there were 25,000;poor single-parent fathers compared to 327,000 poor two-parent families. (Table 1.4)
Single-parent mothers have, without fail, made up a disproportionate number of poor families with children. In 1998, for example, there were five times as many two-parent families as single-parent mothers, but an almost equal number of poor families. This inequity is due to the persistently high poverty rates for single-parent mothers. In almost twenty years, the poverty rate for these families has never dropped below 50 percent.
Like the national child poverty rate, provincial child poverty rates tend to rise in economic downturns and fall during economic growth. And like the national rate, provincial child poverty rates have not had a sustained recovery from the high rates of the recession of 1990-1991. Since 1992, provincial poverty rates have fluctuated up and down. In 1998, the rates in all provinces except Newfoundland went down. Between 1997 and 1998, Nova Scotia had the largest percentage point drop, down 4.1 percentage points, followed by Prince Edward Island (3.7 percentage points), Manitoba (3.5 percentage points) and British Columbia (3.2;percentage points). (Table 1.5)
Table 1.1: Poverty trends for children under 18 years of age, 1980-1998
Year |
Number of poor children | All children |
Poverty rate(%) |
1980 |
1,061,000 |
6,713,000 |
15.8 |
1981 |
1,090,000 |
6,640,000 |
16.4 |
1982 |
1,258,000 |
6,575,000 |
19.1 |
1983 |
1,299,000 |
6,545,000 |
19.8 |
1984 |
1,361,000 |
6,483,000 |
21.0 |
1985 |
1,258,000 |
6,468,000 |
19.5 |
1986 |
1,148,000 |
6,518,000 |
17.6 |
1987 |
1,150,000 |
6,516,000 |
17.7 |
1988 |
1,053,000 |
6,558,000 |
16.1 |
1989 |
1,016,000 |
6,636,000 |
15.3 |
1990 |
1,195,000 |
6,732,000 |
17.8 |
1991 |
1,281,000 |
6,786,000 |
18.9 |
1992 |
1,316,000 |
6,865,000 |
19.2 |
1993 |
1,484,000 |
6,953,000 |
21.3 |
1994 |
1,362,000 |
6,997,000 |
19.5 |
1995 |
1,472,000 |
7,011,000 |
21.0 |
1996 |
1,533,000 |
7,095,000 |
21.6 |
1997 |
1,459,000 |
7,081,000 |
20.6 |
1998 |
1,353,000 |
7,052,000 |
19.2 |
Table 1.2: Poverty trends for two-parent families, 1980-1998
|
Year |
Number of poor two-parent families |
All two-parent families |
Poverty rate % |
|
1980 |
297,000 |
3,073,000 |
9.7 |
|
1981 |
313,000 |
3,059,000 |
10.2 |
|
1982 |
360,000 |
3,032,000 |
11.9 |
|
1983 |
385,000 |
3,054,000 |
12.6 |
|
1984 |
390,000 |
2,976,000 |
13.1 |
|
1985 |
353,000 |
2,995,000 |
11.8 |
|
1986 |
331,000 |
3,030,000 |
10.9 |
|
1987 |
308,000 |
2,989,000 |
10.3 |
|
1988 |
277,000 |
3,036,000 |
9.1 |
|
1989 |
264,000 |
3,048,000 |
8.7 |
|
1990 |
298,000 |
3,047,000 |
9.8 |
|
1991 |
328,000 |
3,044,000 |
10.8 |
|
1992 |
320,000 |
3,032,000 |
10.6 |
|
1993 |
373,000 |
3,063,000 |
12.2 |
|
1994 |
355,000 |
3,091,000 |
11.5 |
|
1995 |
402,000 |
3,134,000 |
12.8 |
|
1996 |
421,000 |
3,137,000 |
13.4 |
|
1997 |
390,000 |
3,125,000 |
12.5 |
|
1998 |
327,000 |
3,062,000 |
10.7 |
|
Year |
Number of poor single-parent mothers |
All single-parent mothers |
Poverty rate (%) |
|
1980 |
206,000 |
360,000 |
57.3 |
|
1981 |
189,000 |
353,000 |
53.5 |
|
1982 |
231,000 |
389,000 |
59.3 |
|
1983 |
234,000 |
386,000 |
60.7 |
|
1984 |
266,000 |
427,000 |
62.3 |
|
1985 |
254,000 |
416,000 |
61.1 |
|
1986 |
233,000 |
403,000 |
57.7 |
|
1987 |
246,000 |
423,000 |
58.3 |
|
1988 |
245,000 |
444,000 |
55.3 |
|
1989 |
242,000 |
457,000 |
52.9 |
|
1990 |
289,000 |
486,000 |
59.5 |
|
1991 |
300,000 |
497,000 |
60.3 |
|
1992 |
343,000 |
604,000 |
56.9 |
|
1993 |
360,000 |
610,000 |
59.0 |
|
1994 |
312,000 |
554,000 |
56.4 |
|
1995 |
321,000 |
565,000 |
56.8 |
|
1996 |
328,000 |
563,000 |
58.4 |
|
1997 |
311,000 |
553,000 |
56.2 |
|
1998 |
307,000 |
580,000 |
52.9 |
Table 1.4: Poverty trends for single-parent fathers, 1980-1998
|
Year |
Number of poor single-parent fathers |
All single-parent fathers |
Poverty rate (%) |
|
1980 |
15,000 |
57,000 |
25.4 |
|
1981 |
Sample too small |
61,000 |
- |
|
1982 |
17,000 |
64,000 |
26.1 |
|
1983 |
15,000 |
53,000 |
28.6 |
|
1984 |
17,000 |
63,000 |
27.0 |
|
1985 |
15,000 |
56,000 |
26.9 |
|
1986 |
17,000 |
72,000 |
23.4 |
|
1987 |
Sample too small |
60,000 |
- |
|
1988 |
17,000 |
70,000 |
24.3 |
|
1989 |
Sample too small |
61,000 |
- |
|
1990 |
22,000 |
86,000 |
25.5 |
|
1991 |
17,000 |
73,000 |
22.6 |
|
1992 |
16,000 |
82,000 |
18.9 |
|
1993 |
31,000 |
101,000 |
30.9 |
|
1994 |
29,000 |
91,000 |
32.3 |
|
1995 |
29,000 |
95,000 |
30.7 |
|
1996 |
26,000 |
95,000 |
27.5 |
|
1997 |
23,000 |
101,000 |
23.2 |
|
1998 |
25,000 |
109,000 |
23.1 |
Table 1.5: Poverty rates (%) for children under 18 years of age by province, 1980-1998
|
Year |
Province |
|||||||||
|
Newfoundland |
Prince Edward Island |
Nova Scotia |
New Brunswick |
Quebec |
Ontario |
Manitoba |
Saskatchewan |
Alberta |
British Columbia |
|
|
1980 |
28.9 |
14.3 |
15.9 |
20.3 |
19.3 |
14.4 |
18.5 |
11.4 |
12.3 |
10.6 |
|
1981 |
21.6 |
22.7 |
18.0 |
23.9 |
20.0 |
13.6 |
19.6 |
19.7 |
11.9 |
14.3 |
|
1982 |
25.7 |
20.1 |
22.1 |
26.2 |
21.0 |
17.5 |
24.5 |
18.2 |
13.7 |
18.4 |
|
1983 |
31.2 |
16.1 |
22.8 |
27.3 |
21.2 |
17.4 |
23.8 |
22.6 |
19.3 |
16.7 |
|
1984 |
28.8 |
17.7 |
20.6 |
27.0 |
24.1 |
16.6 |
21.2 |
23.8 |
23.5 |
21.1 |
|
1985 |
28.6 |
14.8 |
19.9 |
21.2 |
21.2 |
15.9 |
22.8 |
21.2 |
20.2 |
21.7 |
|
1986 |
25.7 |
14.1 |
18.4 |
19.2 |
19.8 |
13.1 |
24.2 |
24.9 |
16.6 |
20.5 |
|
1987 |
25.4 |
15.1 |
17.6 |
20.7 |
20.9 |
12.7 |
23.2 |
19.9 |
20.4 |
18.7 |
|
1988 |
21.0 |
13.2 |
14.9 |
18.5 |
19.0 |
12.0 |
22.1 |
21.9 |
17.8 |
15.4 |
|
1989 |
19.8 |
12.7 |
16.5 |
18.0 |
16.3 |
11.6 |
22.7 |
22.0 |
19.1 |
14.7 |
|
1990 |
20.8 |
14.0 |
16.8 |
18.6 |
19.5 |
14.8 |
24.0 |
21.8 |
19.8 |
17.6 |
|
1991 |
20.6 |
15.6 |
20.6 |
19.2 |
20.4 |
17.3 |
30.9 |
22.4 |
19.2 |
14.4 |
|
1992 |
26.8 |
12.7 |
19.4 |
15.9 |
19.3 |
16.3 |
24.2 |
24.0 |
24.5 |
19.3 |
|
1993 |
21.8 |
11.4 |
23.4 |
18.0 |
21.4 |
20.8 |
26.1 |
24.8 |
20.6 |
21.5 |
|
1994 |
23.4 |
13.3 |
20.5 |
18.3 |
19.8 |
18.1 |
22.8 |
22.9 |
18.5 |
21.2 |
|
1995 |
26.2 |
14.2 |
21.5 |
24.4 |
22.6 |
19.1 |
23.2 |
21.8 |
21.7 |
20.8 |
|
1996 |
24.7 |
16.8 |
22.5 |
18.9 |
23.3 |
19.9 |
27.1 |
22.7 |
22.4 |
21.0 |
|
1997 |
24.6 |
16.2 |
23.4 |
18.4 |
24.7 |
18.7 |
27.1 |
20.3 |
18.3 |
18.1 |
|
1998 |
25.3 |
12.5 |
19.3 |
18.1 |
24.0 |
17.7 |
23.6 |
18.8 |
17.3 |
14.9 |
The vast majority (81.0 percent) of children in Canada lived in two-parent families in 1998 as shown in Figure 2.1. Another 13.6 percent of children lived with single-parent mother families and 2.1 percent lived with single-parent fathers. The remaining 3.3 percent of children lived in other types of families such as elderly families.
When we look at children who were not poor, the distribution by family type is very similar to that of all children, with a slightly higher percentage in two-parent families and a lower percentage in single-parent mother families.
For poor children, the picture is quite different. Only half (52.0 percent) of poor children lived in two-parent families. Forty percent lived with single-parent mothers. This was roughly six times the rate for non-poor children.
A much higher percentage of poor children lived with single-parent mothers because the poverty rate for that family type was extremely high. As noted earlier, in 1998 the poverty rate for single-parent mothers was 52.9 percent compared to 10.7 percent for two-parent families.
The number of poor children living with single-parent mothers has increased by 52;percent in the last two decades as shown in Figure 2.2. There were 538,000 poor children living with single-parent mothers in 1998 compared to 354,000 in 1980. The increase has been driven by the rise in the number of single-parent mothers over this time period and the persistently high poverty rate for this type of family. The number of poor children living in two-parent families also increased over the same time, but only by 7.8 percent.
Although poor children are more likely to live with single-parent mothers than non-poor children, the long-standing myth that most poor children live in single-parent households is not true. In 1998, 703,000 poor children lived in two-parent families, while 538,000 lived with single-parent mothers and 38,000 lived with single-parent fathers.
TOP
3.0 NUMBER AND AGE OF CHILDREN
We have seen that poverty rates for two-parent families are relatively low, and rates for families led by single-parent mothers are high. Within these general ranges, the rates vary noticeably with the number and age of children.
Figure 3.1 shows the poverty rates for two-parent families, and Figure 3.2 shows the rates for families led by single-parent mothers. The figures show that poverty rates increase with the number of children but decrease once the youngest child reaches school age.
We can see how the ages and numbers of children are also significant for families led by single-parent mothers. However, the poverty rates are much higher for single-parent mothers than for two-parent families. Figure 3.2 shows that the poverty rate for single-parent mothers when both children were under age seven was 82.6 percent in 1998. The rate drops to 59.7;percent when the two children were of mixed age groups - one under seven and one between seven and 17. The lowest rate was 47.5 percent when both children were seven or older. Like two-parent families, the poverty rates are lower when there is only one child in the family and higher when there are three or more children.
TOP
4.0 AGE OF THE MAJOR INCOME EARNER
Poor children were more likely to live with younger parents than non-poor children as illustrated in Figure 4.1. In 1998, close to three-quarters (71.1 percent) of poor children lived in families where the major income earner was less than 35 years old compared to 58.3;percent of non-poor children.
This is not surprising given that younger families have higher poverty rates than older families. For example, in 1998 the poverty rate was 44.6 percent for two-parent families where the major income earner was less than 25 years old. The rate drops to 9.5 percent when the major income earner was between 35 and 44 years old.
A similar pattern is observed for single-parent mothers, although the poverty rates are more extreme. The poverty rate was 82.7 percent for single-parent mothers who were less than 25 years old. The rate dropped to 45.1 percent for single-parent mothers between 35 to 44 years old. Although 45.1 percent is still an exceptionally high poverty rate, it is almost half that of the younger mothers.
The higher poverty rate for young parents reflects a number of factors. The unemployment rate for people under 25 years old is higher than for older age groups. Young working parents are more likely to have lower entry-level wages than wages for older, more experienced workers. Young parents may also have interrupted their education or postponed higher education in order to look after their children. Lower levels of education often translate into lower earnings.
TOP
5.0 EDUCATION OF THE MAJOR INCOME EARNER
As Figure 5.1 shows, in 1998 only 15.9 percent of children in Canada lived in families where the major income earner had less than a high school diploma. The number is slightly lower for non-poor children at 12.7 percent. For poor children, the story is quite different. Close to one-third (29.2 percent) of poor children lived in families where the major income earner’s level of education was less than high school.
As income is often closely related to education, these findings are not surprising. As might be expected, a high percentage (67.4 percent) of non-poor children lived in families where the major income earner had more than a high school degree. Less than half (46.9;percent) of poor children lived in this type of family. More telling, only four percent of poor children lived in a family where the major income earner had a university degree, compared to 20.2 percent of non-poor children. (Table 5.1)
Interestingly, the same percentage of poor children and non-poor children live in families where the major income earner’s highest level of education is a high school diploma. This would seem to emphasize that education below and above a high school diploma have the largest impact on whether a child lives in poverty.
When we look at poverty rates by family type, we see the strong effect that education can have on the risk of poverty. As shown earlier, the poverty rate for single-parent mothers in 1998 was 52.9 percent. If the mother had at least a high school diploma, the poverty rate dropped slightly to 47.1 percent. If the mother’s highest level of education was less than high school, the poverty rate jumped to 73.8 percent. (Table 5.2)
Poverty rates for two-parent families show the same pattern although the rates are lower. For all two-parent families, the poverty rate in 1998 was 10.7 percent. For families where the major income earner had at least a high school diploma, the poverty rate was slightly lower at 8.5 percent. When the major income earner did not have at least a high school diploma, the poverty rate was double that of all families at 20.5 percent. (Table 5.2)
Low levels of education can be either a cause of poverty or an effect. Young people who drop out of school may be poor because they lack the skills needed to get good jobs. On the other hand, young women who drop out of school because they are pregnant may be poor because of the hardships associated with single parenthood. The fact that they are poorly educated is a result of their family circumstances rather than an immediate cause of poverty.
We have seen that the risk of poverty tends to decrease with higher levels of education. This does not mean, however, that higher levels of education make families immune to poverty. Figures 5.2 and 5.3 show that almost half (46.9 percent) of all poor two-parent family major income earners and 53.9 percent of poor single-parent mothers had actually gone beyond high school. Poor people are obviously not all uneducated. Poverty may also be a result of few job opportunities or barriers to accepting and holding a job than simply a lack of education. Examples of some barriers could range from disabilities to a lack of affordable, quality child care.
Table 5.1: Distribution of children by highest level of education of family major income earner, 1998*
|
Highest level of education |
All children |
Non-poor children |
Poor children |
|||
|
Number |
% |
Number |
% |
Number |
% |
|
|
Less than high school |
1,118,000 |
15.9 |
725,000 |
12.7 |
393,000 |
29.2 |
|
High school diploma |
1,049,000 |
14.9 |
853,000 |
15.0 |
196,000 |
14.6 |
|
Some post-secondary |
843,000 |
12.0 |
626,000 |
11.0 |
217,000 |
16.1 |
|
Post-secondary diploma |
2,422,000 |
34.4 |
2,063,000 |
36.2 |
359,000 |
26.7 |
|
University degree |
1,203,000 |
17.1 |
1,149,000 |
20.2 |
54,000 |
4.0 |
|
Unknown |
409,000 |
5.8 |
283,000 |
5.0 |
126,000 |
9.4 |
|
Total |
7,043,000 |
100.0 |
5,698,000 |
100.0 |
1,344,000 |
100.0 |
*Excludes 9,000 unattached children, that is, children who were not living with a relative.
Table 5.2: Poverty rate for families with children by highest level of education of family major income earner, 1998
|
Highest level of education |
Two-parent family |
Single-parent mothers |
||
|
Number of poor families |
Poverty rate (%) |
Number of poor families |
Poverty rate (%) |
|
|
Less than high school |
89,000 |
20.5 |
76,000 |
73.8 |
|
High school diploma or more |
211,000 |
8.5 |
204,000 |
47.1 |
TOP
6.0 NUMBER OF EARNERS AND LABOUR FORCE ACTIVITY
The work activity of the adults in a family plays a key role in determining if the family is poor or not. We examine work activity by looking at the number of earners in a child’s family and the labour force activity of the major income earner in the family. The number of earners tells us how many adults worked during the year, regardless of how long the work lasted or if it was full-time or part-time. Labour force status tells us if the major income earner in the family worked full-time for the full year or some other arrangement such as part-time or part year.
Figure 6.1 shows child poverty rates by the number of earners in a family in 1998. Children with no earners in their families had the highest poverty rates in 1998. Almost all children (95 percent) in single-parent mother families with no earners were poor and 88.7 percent of children in two-parent families were poor. With one earner in the family, poverty rates drop substantially. However, children in single-parent mother families with one earner had much higher poverty rates than children in two-parent families with one earner – 42.5 percent compared to 27.2 percent. For both types of families, more poor children lived in families with at least one earner than in families with no earner. (Table 6.1)
As would be expected, there was a significant difference between the distribution of poor and non-poor children by the labour force activity of the major income earner in the family. Figure 6.2 shows that three-quarters of non-poor children lived in families where the major income earner worked full year, full-time in 1998. Only 23.1 percent of poor children lived in such families, although a further 27.3 percent lived in families where the major income earner worked at some point during the year, although not full year, full-time.
Almost a third (32.1 percent) of poor children lived in families where the major income earner did not work at all during the year. Only 1.9 percent of non-poor children lived in this type of family.
Although a greater proportion of poor children lived in families where the major income earner did not work, the perception that poor children live in families where the adults do not work at all needs to be somewhat tempered. Fully half of poor children lived in families where the major income earner had worked part, if not all, of the year in 1998.
This observation raises questions about the adequacy of jobs available to the working parents of these children. There were 311,000 poor children living in families where the major income earner worked full-year, full-time. Children who lived in two-parent families were still buffered from poverty more than those who lived with single-parent mothers. Of children who lived in two-parent families where the major income earner worked full-year, full-time, only 5.6 percent were poor. For children living with single-parent mothers who worked full-year, full-time, 18.9 percent were poor. (Table 6.2)
Table 6.1: Child poverty rates by number of earners in family, 1998
|
Number of earners by family type |
All children |
Poor children |
Poverty rate (%) |
|
All two-parent families |
5,712,000 |
703,000 |
12.3 |
|
|
175,000 |
155,000 |
88.7 |
|
|
1,034,000 |
281,000 |
27.2 |
|
|
3,596,000 |
248,000 |
6.9 |
|
|
907,000 |
19,000 |
2.1 |
|
All single-parent mother families |
956,000 |
538,000 |
56.3 |
|
|
252,000 |
239,000 |
95.0 |
|
|
704,000 |
299,000 |
42.5 |
Table 6.2: Child poverty rates by labour force activity of family major income earner, 1998
|
Labour force activity of major family income earner |
Total children* |
Children in two-parent families |
Children in single-parent mother families |
|||
|
Number of poor children |
Poverty rate (%) |
Number of poor children |
Poverty rate (%) |
Number of poor children |
Poverty rate (%) |
|
|
Full year, full-time |
311,000 |
6.7 |
235,000 |
5.6 |
61,000 |
18.9 |
|
Worker, but not full-year, full-time |
367,000 |
34.0 |
165,000 |
22.3 |
178,000 |
64.1 |
|
Did not work during year |
431,000 |
80.1 |
197,000 |
73.5 |
205,000 |
89.8 |
|
Age outside 16-64 |
22,000 |
41.1 |
0 |
– |
0 |
– |
|
Unknown |
214,000 |
29.1 |
107,000 |
19.6 |
95,000 |
73.2 |
|
Total |
1,344,000 |
19.1 |
703,000 |
12.3 |
538,000 |
56.3 |
*Excludes 9,000 unattached children, that is, children who were not living with a relative.
We have just examined factors that put children and their families at a higher risk of poverty. We can look at these same factors for Aboriginal children. We do not have much data about the number of Aboriginal children who live in families with these risk factors, but we do have information about many of these risk factors for the Aboriginal population in general.
Previous editions of Poverty Profile did not include information about Aboriginal people because data was not readily available from the annual income survey. Given the high rates of poverty of Aboriginal people in Canada, we feel it is important to present what we can from other sources of data. For this report, most data on Aboriginal children comes from the 1996 census. Children are defined to be under 15 years old, unlike the under 18 years of age definition used in the rest of this publication.
Readers should keep in mind that there are often variations within the Aboriginal population by factors such as Aboriginal group (North American Indian, Métis or Inuit) or by geographic location (province or territory, urban or rural). In this section we present data for all Aboriginal people without detailed breakdowns.
We have seen that children living with single-parent mothers have substantially higher rates of poverty than children living in two-parent families do. In 1996, almost one-third (32;percent) of all Aboriginal children under the age of 15 living in families lived in a single-parent family (mother or father). This was twice the rate for children in the general population. The rate is even higher when we look at Aboriginal children living in large urban areas. About 46 percent of Aboriginal children living in families in large urban areas were in a single-parent family(1).
As shown earlier, families with more children had higher poverty rates. On average, Aboriginal women have more children than non-Aboriginal women. For example, in 1996 an Aboriginal single-parent mother had an average of 2.3 children, compared to 1.8 children for non-Aboriginal single-parent mothers(2).
A low level of education is a risk factor for poverty. While Aboriginal people have made gains in education in past years, they have experienced little improvement relative to non-Aboriginal people. In 1996, over half (54 percent) of Aboriginal people aged 15 and over had not received a high school diploma compared to 35 percent of the non-Aboriginal population. For younger Aboriginal people aged 20 to 29, a smaller proportion (45 percent) had not received a high school diploma. However, this was still considerably higher than the corresponding proportion, 17 percent, for non-Aboriginal people aged 20 to 29(3).
In Section 5.0, we showed that the majority of children who were not poor lived in families where the major income earner had more than a high school diploma. Relatively fewer Aboriginal people (37.9 percent) aged 15 and older had this level of education in 1996 than non-Aboriginal people (51.3 percent). Looking specifically at university degrees, there is a substantial gap between Aboriginal and non-Aboriginal people. A very small percentage, 3.3 percent, of Aboriginal people aged 15 and older held university degrees in 1996 compared with 13.5 percent of non-Aboriginal people(4). The difference is even greater for younger people. Four percent of the Aboriginal population 20 to 29 years old had a university degree compared to 19 percent of non-Aboriginal people(5).
Young Aboriginal people are less likely to attend school than young non-Aboriginal people. About two-thirds (68 percent) of Aboriginal people 15 to 19 years old were in school (full-time or part-time) in 1996 compared to 83 percent of their non-Aboriginal counterparts. Similarly, for people aged 20 to 24, 31 percent of Aboriginal people were attending school compared to 49 percent of non-Aboriginal people(6). However, it seems that Aboriginal people are more likely than non-Aboriginal individuals to return to school as adults. In 1996, 12;percent of Aboriginal people aged 25 to 34 were full-time students compared to the corresponding 6 percent of non-Aboriginal people. The same pattern can be seen in the next oldest age group of 35 to 44. Seven percent of Aboriginal individuals in this age group were full-time students compared to 3 percent of non-Aboriginal people(7).
There are many reasons for the challenges Aboriginal people face in predominantly non-Aboriginal education systems. For example, the first language of many Aboriginal people is not the language (English or French) of the schools they attend. Aboriginal students may have fewer role models to encourage them to continue their schooling. In addition, many Aboriginal communities are geographically remote and may have found it difficult to recruit and keep well-qualified teachers(8). Aboriginal children in geographically remote communities may also have to leave the community to attend post-secondary, or even secondary, school.
There are different ways to represent the Aboriginal population of Canada. The information quoted in this section uses the Aboriginal identity concept as the definition for the Aboriginal population. A person is considered to be Aboriginal if they reported identifying with at least one Aboriginal group in the 1996 Census question, "Is this person an Aboriginal person, that is, North American Indian, Métis, or Inuit (Eskimo)?" and/or who reported being a Treaty Indian or Registered Indian as defined by the Indian Act of Canada, and/or who were members of an Indian Band or First Nation. In the 1996 Census, enumeration was not permitted, or was interrupted before it could be completed, on 77 Indian reserves and settlements. It is estimated that 44,000 people on these reserves and settlements were incompletely enumerated. These people are not included in the tabulations used in this section.
We saw that poor children are more likely to live in families where the major income earner does not work at all or does not work full-time, full-year. Aboriginal people are less likely to be part of the paid workforce. For example, in 1996, 41 percent of Aboriginal women and 48 percent of Aboriginal men were employed compared to 53.1 percent of non-Aboriginal women and 65.6;percent of non-Aboriginal men(9). Of those Aboriginal people who reported employment income for 1995, just over one-third worked for the full year on a full-time basis compared with half of the total population(10).
Those Aboriginal people who were employed tended to be concentrated in low-paying occupations. In 1996, they were over-represented in primary industries, in sales and service jobs and in trades. They were underrepresented among those employed in higher paying occupations like management positions and in professional occupations(11).
The incomes of Aboriginal people are substantially lower than the incomes of non-Aboriginal people. In 1995, the average income of Aboriginal people was $15,700. This was only 62 percent of the average income of non-Aboriginal people ($25,400). Like the non-Aboriginal population, the largest share of the income of Aboriginal people comes from employment earnings. In 1995, wages and salaries plus net self-employment income made up 70 percent of all income of Aboriginal people, slightly lower than the 75 percent figure for non-Aboriginal people. However, Aboriginal people receive about one-quarter of their income from government transfer payments. This is much higher than the 14 percent share for the non-Aboriginal population(12).
Given these risk factors, it would be expected that Aboriginal children have high poverty rates. We can first examine poverty rates using low-income cutoffs. Low income cutoffs exclude the approximately 36 percent of the Aboriginal population residing on reserves or in the three territories. Since income is generally lower for the Aboriginal population on reserves compared to those living off-reserve, their inclusion would likely increase the incidence of low income among the Aboriginal population.
Using the low income cutoffs, in 1995 three out of five (60 percent) Aboriginal children under six years old lived in poor families. The national rate was much lower at one in four (25 percent). Among Aboriginal children six to 14 years old, the poverty rate was lower at 48 percent, but was still more than double the national rate of 22 percent(13). We saw earlier that the poverty rate for single-parent mothers was extremely high. It was even higher for Aboriginal single-parent mothers. Almost three-quarters (73 percent) of Aboriginal single-parent mothers were poor in 1995. The rate for non-Aboriginal single-parent mothers was 45 percent(14).
To include Aboriginal people living on reserves or in the three territories, we can use the income category that falls below $10,000 as a proxy for a poverty line. Almost half of all Aboriginal people (46 percent) aged 15 and older had incomes below $10,000 in 1995. This is much higher than the rate of 27 percent for the non-Aboriginal population. In some major urban areas in the west, the rates are higher. Around half of Aboriginal people in Saskatoon (51 percent), Regina (48 percent) and Edmonton (47 percent) had incomes less than $10,000(15).
Measuring the incidence of poverty does not give us a clear idea of the severity of poverty. We can look at the financial plight of poor families by comparing their incomes to the average incomes of non-poor families. We can also examine the depth of poverty to see if poor people live in abject poverty or a few dollars below the poverty line. We’ll start with an overview of average income.
Note that this section looks at families, not individual children, as income is calculated for the entire family. Incomes are presented in 1998 constant dollars. This means that the dollar amounts have been adjusted for the impact of price changes (inflation) by expressing them in terms of their value, or purchasing power, in 1998.
| Decile | Range |
| Lowest Decile | $18,692 or less |
| 2 | $18,693 – $28,714 |
| 3 | $28,715 – $37,894 |
| 4 | $37,895 – $46,502 |
| 5 | $46,503 – $55,415 |
| 6 | $55,416 – $64,362 |
| 7 | $64,363 – $73,555 |
| 8 | $73,556 – $87,094 |
| 9 | $87,095 – $108,068 |
| Highest decile | Greater than $108,068 |
We can look at income shares using deciles. If income were shared equally among all families, each decile would have a 10 percent share of total income. However, income is not shared equally among families, as shown in Figure 8.2. Families in the lowest decile had only two percent of aggregate income in 1998 while families in the highest decile had 25 percent of aggregate income. Between 1994 and 1998 income inequality has grown slightly with many of the lower deciles’ income shares decreasing and those of the highest groups increasing.
We can also look at changes in total income by deciles. We saw in Figure 8.1 that there had been some improvement in before-tax income over the last five years. When we examine the increases by decile, however, we see that the higher deciles, especially the highest group, had much greater increases in their incomes than the lowest deciles. Figure 8.3 shows that the gains were smaller for the lower, or poorer, deciles and bigger for the higher deciles. The uneven gains in income lead to increasing income gaps between the poor and the well-off.
8.3 Average Income of the Poor Compared to the Non-Poor
When we look at the average 1998 incomes of two-parent families and single-parent mothers, two-parent families have higher incomes whether the families are poor or not. Figure 8.4 shows that the difference is smaller for poor families, but still exists. This emphasizes the importance of having a second earner or second potential earner in a family and the importance of two adults supporting one another with family responsibilities.
Another important difference is that between poor and non-poor families. The average before-tax income of poor two-parent families was only 28 percent of the average for non-poor families. (Table 8.2)
In 1998, the difference between poor single-parent mothers and non-poor mothers was not as marked. The before-tax average income of poor single-parent mothers was 37 percent of non-poor single mothers. (Table 8.2) However, this seeming advantage for single-parent mothers is more due to the much lower average income of their non-poor counterparts than to poor single-parent mothers being better off than poor two-parent families.
You might think that after-tax income would show a significant reduction in the difference between poor and non-poor families’ incomes since one of the goals of taxes is income redistribution. However, while poor families do have a higher percentage of after-tax income than before-tax income, the increase is only six to seven percentage points for both types of families. (Table 8.2)
No matter whether we examine before-tax or after-tax income, the average income of poor single-parent mothers is less than half that of non-poor single mothers. Poor two-parent families’ average income is not even 40 percent of non-poor two-parent families’ average income.
| Percent of Poverty | Single-Parent Mother | Two-Parent Family |
| Less than 50% | Less than $13,658 | Less than $16,532 |
| 50.0% - 74.9% | $13,658 – $20,485 | $16,532 – $24,976 |
| 75.0% - 99.9% | $20,486 – $27,314 | $24,797 – $33,062 |
We have already seen that families with young major income earners have higher rates of poverty. You may think that the same reasons that younger families are more likely to be poor would also make them the bulk of extremely poor families. While this hypothesis holds true to a certain degree for single-parent mothers, it does not hold for two-parent families.
When we look at single-parent mothers with income less than half of the poverty line, we see that just over half of these families had major income earners less than 35 years old. Families with major income earners between 35 and 64 years old made up 46 percent of the poorest of the poor. (Table 8.4)
For two-parent families, families with major income earners under 35 years old made up only one-third of the poorest income category. This means that 68 percent were families with major income earners between 35 and 64 years old. In fact, half of the poorest two-parent families had major income earners between 35 and 44 years old. (Table 8.4)
These findings are of concern because they show that the poorest of the poor are not just young parents just starting out in their careers. A great number of them are over 35 years old. We do not have the data to look at these older parents’ income sources and work activity. However, it is likely that they do not have a strong attachment to the workforce. If they were working, they probably had very low paying jobs or short-term jobs. These families would likely depend heavily on welfare and other government transfers. As we showed in Chapter 6, one of the best guarantees against poverty is to work full-year at a full-time job. Older parents may have more difficulty entering the workforce and securing a good-paying job compared to a younger parent. An older parent’s skills and education may be more outdated and employers may be reluctant to take them on in entry-level jobs.
|
Year |
Poor two-parent families |
Non-poor two-parent families |
Poor single-parent mothers |
Non-poor single-parent mothers |
|
1980 |
$19,374 |
$66,917 |
$13,639 |
$42,105 |
|
1981 |
$19,675 |
$66,283 |
$13,071 |
$40,779 |
|
1982 |
$19,851 |
$65,454 |
$13,913 |
$38,268 |
|
1983 |
$20,137 |
$65,537 |
$13,261 |
$39,586 |
|
1984 |
$19,834 |
$66,163 |
$13,958 |
$41,866 |
|
1985 |
$20,466 |
$67,374 |
$13,537 |
$41,753 |
|
1986 |
$19,992 |
$68,382 |
$13,898 |
$38,452 |
|
1987 |
$20,363 |
$69,619 |
$13,922 |
$40,313 |
|
1988 |
$20,930 |
$70,244 |
$14,083 |
$38,910 |
|
1989 |
$19,970 |
$72,269 |
$14,766 |
$41,004 |
|
1990 |
$20,350 |
$71,291 |
$14,574 |
$41,346 |
|
1991 |
$20,728 |
$70,104 |
$14,458 |
$39,449 |
|
1992 |
$19,242 |
$70,646 |
$14,990 |
$40,061 |
|
1993 |
$20,983 |
$69,602 |
$15,657 |
$37,577 |
|
1994 |
$20,368 |
$70,850 |
$15,044 |
$39,274 |
|
1995 |
$20,865 |
$71,156 |
$15,229 |
$40,485 |
|
1996 |
$20,633 |
$71,582 |
$15,102 |
$39,721 |
|
1997 |
$21,290 |
$73,224 |
$14,447 |
$39,120 |
|
1998 |
$21,612 |
$75,836 |
$15,119 |
$40,771 |
Table 8.2: Average incomes of families, 1998
|
$15,119 |
$40,771 |
37% |
$27,195 |
|
|
$21,612 |
$75,836 |
28% |
$70,043 |
|
|
$14,954 |
$35,069 |
43% |
$24,424 |
|
|
$20,830 |
$59,170 |
35% |
$55,074 |
Table 8.3: Number and distribution of poor families by income categories based on percentage of the poverty line, 1998
|
Income category as percentage of poverty line |
Poor two-parent families |
Poor single-parent mothers |
||
|
Number |
Distribution (%) |
Number |
Distribution (%) |
|
|
Less than 50% |
56,000 |
17.1 |
79,000 |
25.7 |
|
50.0% to 74.9% |
106,000 |
32.4 |
133,000 |
43.3 |
|
75.0% to 99.9% |
165,000 |
50.5 |
95,000 |
30.9 |
|
Total |
327,000 |
100.0 |
307,000 |
100.0 |
Table 8.4: Number and distribution of poor families with income less than 50% of the poverty line, by age of family major income earner, 1998
|
Age of major income earner |
Two-parent families |
Single-parent mothers |
||
|
Number |
Distribution (%) |
Number |
Distribution (%) |
|
|
Less than 35 years old |
18,000 |
32.1 |
43,000 |
54.4 |
|
35–64 years old |
38,000 |
67.9 |
36,000 |
45.6 |
|
|
28,000 |
50.0 |
27,000 |
34.2 |
|
|
sample too small |
sample too small |
||
|
Total |
56,000 |
100.0 |
79,000 |
100.0 |
Sources of income for the families of poor children are quite different from the sources of incomes of families who are not poor. Parents in poor families are less likely to be working than are parents in non-poor families. Still, the myth that all poor families depend solely on welfare and other government payments is not true.
Like the chapter on depth of poverty, this section looks at families, not individual children, as income is calculated for the entire family.
9.1 Major Source of Family Income
In 1998, almost all non-poor children (95.4 percent) lived in families where the major source of income was wages and salaries or self-employment income as shown in Figure 9.1. The importance of earnings in keeping families out of poverty is reinforced when we look at poor children. Only slightly more than a third (38.1 percent) of poor children lived in families where the major source of income was wages and salaries or self-employment income.
Children who lived in families where the major source of income was wages and salaries had a much lower chance of living in poverty compared to children whose family relied on government transfers. The poverty rate in 1998 was only 5.4 percent for children living in two-parent families where the major source of income is wages and salaries. The poverty rate jumped to 74.4 percent when the major source of income was government transfers. For children living with single-parent mothers, the poverty rate was 22.6 percent when the major source of income was wages and salaries. The poverty rate was 90.3 percent when the major source of income was government transfers.
In addition to the variation in poverty rates by the family’s major source of income, there was also a substantial difference between family types. This was especially noticeable when we looked at the poverty rates for families that relied on wages and salaries. In 1998, only 5.4;percent of children in two-parent families lived in poverty. This was in striking contrast to the poverty rate of 22.6 percent for children living with single-parent mothers. This again emphasizes the difficulties single-parent mothers have without a second earner in the family or a second adult to share child care responsibilities. It may also be a reflection of the lower wages that women earn and the extra difficulties for single-parents of holding a well-paying and demanding job while juggling their sole responsibilities for their children’s needs.
9.2 Government Transfers
Obviously, many poor parents and children rely on government transfers. Figure 9.2 shows the average amount of government transfers received by poor families with children in 1998. The average transfer payment was about $10,000 for both types of families. However, the lower average income of poor single-parent mothers means that government transfers made up a higher proportion of their income than two-parent families. (Table 9.1) Figure 9.3 shows government programs of one kind or another accounted for 46.3 percent of the total income of two-parent families and 67 percent of total income for single-parent mothers.
Many non-poor families also receive transfer payments, mainly child tax benefits and GST/HST credits. The average transfer payments to non-poor families were around half the level of payments to poor families. But given the much higher incomes of non-poor families, government transfers only made up a very small percentage of their total income. As displayed in Figure 9.3, government transfers accounted for 5.8 percent of the total income of two-parent families and 13.6 percent of total income for single-parent mothers in 1998.
A government transfer that is often an important source of income to poor families is welfare. Single-parent mothers have much higher rates of welfare receipt than two-parent families. Welfare payments were reported by 68.5 percent of poor single-parent mothers. Just over a third (35.2 percent) of poor two-parent families received welfare in 1998. The average amount received in 1998 was higher for two-parent families at $9,681 compared to $7,931 for poor single-parent mothers. (Table 9.2)
"Government transfers" include Employment Insurance, Old Age Security, Canada and Quebec Pension Plans, Guaranteed Income Supplements, Spouse's Allowance, Child Tax Benefit, other child credits or allowances, welfare from provincial and municipal programs, workers' compensation benefits, GST/HST credits, provincial and territorial tax credits and any other government transfers.
More than half (58 percent) of poor children lived in families where the major source of income was government transfers. Only a very small percent (3.2 percent) of non-poor children lived in such families.
