Education helps reduce the risk of low income—especially among vulnerable groups

Research has shown that, on average, higher levels of education are associated with having a higher income. That means education can also protect against falling under the low-income measure, a threshold Statistics Canada uses to identify Canadians whose household income (after tax and adjusted for family size) is less than half the national median income.

However, a recent study tracking persistence of low income from 2016 to 2022 found that having more education offered even greater protection against low income for certain groups—namely, those who are more financially vulnerable in the first place.

Overall, about 1 in 10 people experienced persistent low income from 2016 to 2022, meaning they were under the low-income measure for at least four of the seven years of the study period.

Notably, some groups were more likely to have persistent low income than others. For example, families headed by a lone female parent (23%) were nearly four times more likely to have persistent low income compared with couples with children (6%), while people who always had limitations in their daily activities due to physical, mental, or health-related conditions (18%) were more than twice as likely than people who didn’t have such limitations (7%).

People in racialized groups (14%) were about twice as likely to have persistent low income as non-racialized, non-Indigenous people (7%), and women (10%) were more likely than men (7%) to have persistent low income.

Further underscoring the overall impact of education, Canadians without a high school diploma were five times more likely to have persistent low income (21%) than those who had a university degree (4%).

Having a higher level of education narrowed these gaps. For example, the gap between the percentage of men (7%) and women (10%) who persistently fell under the low-income measure was 3 percentage points overall—but this gender gap was wider among men and women without a high school diploma (9 percentage points) than among those with a university degree (less than 1 percentage point).

This effect was especially noticeable for more financially vulnerable groups. Among Canadians without a high school diploma, 42% of those in families headed by a female lone parent had persistent low income, compared to 18% of those in couple families with children overall. The gap between these family types narrowed to 7 percentage points among people with a university education.

Differences were similar for people with activity limitations. The overall gap between people who said they always faced limitations in their daily activities compared to people who did not was 11 percentage points. The gap was wider among people without a high school diploma (15 percentage points) than among people with a university education (4 percentage points).

The full study, “Who experiences persistent low income? A study of various demographic groups from 2016 to 2022,” has more details on the population groups that see this association between higher education and low-income persistence.