Income Distribution refers to the share of total income in society that goes to each fifth of the population, or, more generally, to the distribution of income among Canadian households. Annual income is usually chosen as the indicator of a household's ability to meet its needs, primarily because the necessary statistical data are easily accessible. Economic well-being, however, also depends on other important factors.
Statistics Canada annually conducts a survey of approximately 35 000 households, including families and single persons. According to Statistics Canada's classification, an "economic family unit" is a group of persons who share a common dwelling unit and who are related by blood, marriage or adoption. An "unattached individual" is a person living alone or in a household with others to whom he or she is not related. Total income includes wages and salaries, net income from self-employment, investment income (interest, dividends, rental income), retirement pensions, miscellaneous income such as scholarships and alimony, as well as government transfer payments (welfare, old-age security, family allowance, unemployment insurance, etc). This concept of total income, therefore, corresponds to primary income before taxes and after transfer payments.
Once information about income has been gathered, families are classified by increasing levels of income, from the poorest to the richest. They are divided into 5 groups, known as "quintiles," each representing 20% of all families. The first (or lowest) quintile comprises the poorest families and the last (or highest) quintile includes the richest. The income of the families of each quintile is then calculated in proportion to the income of all families. The percentage of income going to each group in society can thus be measured.
In 1985 families of the lowest quintile accounted for 6.3% of the total income, while those of the highest quintile earned 39.4%. Families of the first quintile had an annual income of less than $17 928 and those of the fifth quintile an income greater than $53 398 (see ELITES).
Statistics Canada annually conducts a survey of approximately 35 000 households, including families and single persons. According to Statistics Canada's classification, an "economic family unit" is a group of persons who share a common dwelling unit and who are related by blood, marriage or adoption. An "unattached individual" is a person living alone or in a household with others to whom he or she is not related. Total income includes wages and salaries, net income from self-employment, investment income (interest, dividends, rental income), retirement pensions, miscellaneous income such as scholarships and alimony, as well as government transfer payments (welfare, old-age security, family allowance, unemployment insurance, etc). This concept of total income, therefore, corresponds to primary income before taxes and after transfer payments.
Once information about income has been gathered, families are classified by increasing levels of income, from the poorest to the richest. They are divided into 5 groups, known as "quintiles," each representing 20% of all families. The first (or lowest) quintile comprises the poorest families and the last (or highest) quintile includes the richest. The income of the families of each quintile is then calculated in proportion to the income of all families. The percentage of income going to each group in society can thus be measured.
In 1985 families of the lowest quintile accounted for 6.3% of the total income, while those of the highest quintile earned 39.4%. Families of the first quintile had an annual income of less than $17 928 and those of the fifth quintile an income greater than $53 398 (see ELITES).