Canadian Intergenerational Economic Mobility and Mobility Traps
April 17, 2018
One measure of unequal opportunity is intergenerational economic mobility, the “chance that people who spent their childhood in that location ended up, as adults, higher on the income and economic-status ranking than their parents” (Sanders 2017). A person who lives in a region with high intergenerational economic mobility will be more likely to be in a higher income bracket in their 40s than their parents were at the same age: “the place you come from is very likely to affect your odds of future success, perhaps as much or more than your family, your culture or anything else in your life” (Sanders 2017).
Dense urban places in Canada, like Toronto, Vancouver, and Calgary, have high intergenerational economic mobility, whereas regions in rural Manitoba, coastal British Columbia, and Newfoundland are ‘mobility traps,’ places where individuals are unlikely to move up the income ladder (Sanders 2017). Rural communities are not always less economically mobile than urban places, rather “higher mobility communities… tend to be areas with lower poverty, less income inequality, and a higher share of immigrants” (Corak 2017, 2), factors more closely associated with urban areas. Mobility traps are “an important issue in many rich countries” (Corak 2017, 1) because of their impact on income inequality and social mobility.
Some cities are undergoing a ‘new urban crisis,’ defined by “the back-to-the-city movement of the affluent and the educated—accompanied by rising inequality, deepening economic segregation, and increasingly unaffordable housing” (Florida 2017). In Toronto and Vancouver, municipal governments have responded to increasingly unaffordable housing prices by implementing policies designed to discourage wealthy investors from speculating on housing prices. Florida (2017) summarizes this urban policy challenge as:
the central contradiction that stands at the heart of today’s urbanized form of knowledge capitalism writ large. The very same clustering of talent, business, and economic capability in large, dense, knowledge-based places also carves deep divisions into our cities and society.
Attracting talent to mobility trap regions can help break the cycle of limited intergenerational economic mobility and the ensuing divisions. Policies which incentivize skilled workers and businesses to relocate to mobility trap areas, such as enhanced government services, reliable internet, tax breaks, improved infrastructure, and enhanced educational opportunities, may foster long-term growth. By transforming mobility trap regions into hubs of talent and opportunity, governments can promote more equitable economic outcomes across Canada.
Works Cited
Corak, Miles. “Divided Landscapes of Economic Opportunity: The Canadian Geography of Intergenerational Income Mobility.” Human Capital and Economic Opportunity Working Group. Working Papers 2017-043, (2017).
Florida, Richard. “Mapping the New Urban Crisis.” City Lab. April 2017. Accessible online: https://www.citylab.com/equity/2017/04/new-urban-crisis-index/521037/
Sanders, Doug & Tom Cardoso. “A tale of Two Canadas: Where you Grew Up Affects Your Income in Adulthood.” Globe and Mail. June 2017.