A Tale of Two Canadas: Where you grew up affects your income in adulthood

By Doug Saunders and Tom Cardoso, Globe and Mail

“A big-data picture of Canada reveals that the place you grew up determines your financial future. An analysis of millions of Canadians’ income data shows a country of opportunity, with most children out-earning their parents – but also a country pocked with mobility traps, where moving up the income ladder is far from certain.”

In Canada, geography is destiny: Your financial future, to a surprisingly large degree, depends on the place in Canada where you happen to grow up.

That reality is revealed on this map and our accompanying set of interactive graphics, produced using a new analysis of millions of Canadians’ income data, the result of years of work by economist Miles Corak.

His study charts intergenerational economic mobility – that is, the chance that people who spent their childhood in that location ended up, as adults, higher on the income and economic-status ranking than their parents. If a region is bright green, there is a high chance that kids who grew up in that region will, by the time they’re in their 40s, be in a higher-income group than their parents were at the same age (wherever those offspring end up living). In the bright red areas, the majority of children grow up to have adult financial success levels similar to, or less than, their parents.

The most dramatic finding by Dr. Corak, a University of Ottawa economist and former economist with Statistics Canada, is that the place you come from is very likely to affect your odds of future success, perhaps as much or more than your family, your culture or anything else in your life. Those results are likely to surprise many Canadians and provoke serious debates about the policies and interventions that can help more people escape intergenerational poverty.

The “Canadian Dream” becomes a reality for a relatively large percentage of Canadians, especially when measured against the financial mobility of citizens of other places. If you are born in Canada to parents in the bottom fifth of the income scale (that is, your parents typically earned less than $23,000 a year in today’s dollars) you are twice as likely to grow up to earn at least a middle-class income than if you were born to the same parents in the United States or Britain.”

For complete story, including interactive regional map of Canada, please visit Globe and Mail site: https://www.theglobeandmail.com/news/national/a-tale-of-two-canadas-where-you-grow-up-affects-your-adult-income/article35444594/

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