Distribution of income
Earnings make up the lion's share of total income
Total income consists primarily of earnings, retirement income, investment income and government transfers. The proportion each component contributes to total income depends on a number of factors, including a person's labour force status (employed, unemployed or not in the labour force) and stage in the life cycle (e.g., a student working part time, a full-time worker at the peak of her career, a retiree). For Canadians generally, earnings made up the highest proportion of total income (75% in 2006), distantly followed by government transfers (12%), retirement income (7%) and investment income (4%).
Significant differences in the distribution of total income by its components are observed among various age groups and family types. For example, the earnings proportion of total income was only 14% in 2006 for elderly families with a main earner aged 65 and over, compared with 72% for lone-parent families, and 85% for all other families.
The importance played by earnings in total income has been decreasing over time but has rebounded in recent years. For example, in the early 1980s, the earnings of Canadians accounted for 80% of total income, on average, falling to 73% by 1996, when government transfers were particularly high. By 2006, it had returned to 75%.
Distribution of total income, 2006
Source: Statistics Canada, Survey of Labour and Income Dynamics, CANSIM table 202-0404.
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