Intergenerational income mobility trends in Canada

Abstract

We document the rise the intergenerational transmission of income using newly updated administrative Canadian tax data for children born between the early 1960s and the mid-1980s. We show that children whose parents were in the bottom income quintile have become less likely to exit the bottom quintile once in adulthood and less likely to transition into the middle class. Declining mobility is observed both at the national and provincial level. While federal and provincial policy-makers should worry about the rise in the strength of the poverty trap, the impact of recent policy developments on children that have yet to become adults remains to be documented.