Measuring off-reserve aboriginal poverty and income inequality in Canada

• Main Author: Tazmeen, Ahmed
• Other Authors: Loxley, John (Economics)
• Published: 2012
• Subjects: Aboriginal; poverty; income; inequality
• Online Access: http://hdl.handle.net/1993/9305

Though there has been substantial research on poverty and inequality in Canada, the issue of Aboriginal poverty and inequality has not yet been examined in a systematic manner. The issue has been discussed, in some cases, as a part of the overall poverty profile, and mostly analysed in a cross-sectional manner. A complete and methodical study of Aboriginal poverty and inequality that allows behaviour of poverty and inequality to be analysed over time remains to be initiated. In order to get a comprehensive comparative picture of Aboriginal income poverty and inequality in Canada, the research measures off-reserve Aboriginal and non-Aboriginal income poverty and inequality for the period 1996-2007 and compares the results for off-reserve Aboriginal and non-Aboriginal population groups. For measurement purposes Statistics Canada’s low income cut-offs are considered as poverty lines. Several commonly known along with some axiomatically correct poverty indices such as Headcount Ratio, Income Gap Ratio, Poverty Gap Index, Foster-Greer-Thorbecke Index, Sen Index and some modifications of the Sen Index such as the Sen-Shorrocks-Thon (SSTO) Index are used. The Gini coefficient is used as the measure of inequality. Both pre-tax and post-tax incomes are considered. Though a substantial decline in off-reserve Aboriginal poverty is recorded by most of the poverty indices by early 2000s, off-reserve Aboriginal poverty remains higher than non-Aboriginal poverty. After the decline, these off-reserve Aboriginal poverty indices remain stable and show some decline from mid-2000s onwards. Income inequality among the non-Aboriginal population remains stable throughout the period whereas off-reserve Aboriginal income inequality shows a slightly increasing trend in the 2000s. According to the breakdown of the SSTO Index, the decline in off-reserve Aboriginal poverty is mainly due to decline in the headcount ratio.