Update on Analytical Studies Research: Education and training

Income Instability of Lone Parents, Singles and Two-parent Families in Canada, 1984 to 2004

by René Morissette and Yuri Ostrovsky
Business and Labour Market Analysis Division
Analytical Studies Branch Research Paper Series, No. 297

Context

The majority of Canadians spend a substantial period of their lifetime in a partnership. Previous studies argued that despite the importance of analysing earnings inequality and instability of individuals, it is also important to study these issues at the family level. Even though a significant minority of Canadians either remain unmarried or become divorced (or widowed), many of these individuals become lone parents. Lone parents and unattached individuals constitute a considerable portion of the population and are potentially more vulnerable to the effects of income instability as they may have fewer income smoothing options at their disposal.

Objective(s)

This paper attempts to answer the following questions: Has there been a widespread increase in earnings instability among lone parents (especially lone mothers) and unattached individuals over the past 20 years? How do the trends in earnings instability among lone parents and unattached individuals compare to the trends among the two-parent families? What is the role of government transfers in mitigating differences in earnings instability across different segments of the earnings distribution among the above-mentioned groups? What is the role of the progressive tax system?

Findings

The paper finds little evidence of a widespread increase in earnings instability in the past two decades and shows that government transfers play a particularly important role in reducing employment income instability of lone mothers and unattached individuals.

Data source(s)

This study uses the Longitudinal Administrative Data base (LAD).

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