Section 5. Income
Youth income is measured by Statistics Canada and the most current data available is from the 2001 Census. All data regarding income is based on income earned in the year of 2000, in 2000-dollars1.
5.1 Presence of Income for Youth
Fewer youth were without wages and salaries in 2000 than in 1995 for Canadian youth. In 2000, 19% of youth did not earn a wage, down 4% from 19952. However, the share of young people with income is well below that of older adults and their income is generally lower than older adults. In 2000, 8 of 10 youth had a source of income compared to nearly all (98%) adults aged 25 to 64. One possible explanation for this difference is that many youth; especially those aged 18 and under were still dependents or were in school.
Figure 5-1: Presence of Income for Youth in Canada in 2000
Source: Statistics Canada, 2001 Census: 95F0431XCB1004
5.2 Income Distribution
The median income of Canadian youth almost doubled between 1995 and 2000 after adjusting for inflation. The median income was $3,316 in 1995 and $6,705 in 2000, that is, half of youth had incomes higher and half lower3. Almost half (42%) of youth in Canada had an income between $2,000 and $9,999 in 2000 - a small decline from 43% in 1995.
The 2001 Census income statistics show that the majority of youth are earning under $10,000 annually, and the largest proportion earns in the range of $2,000 to $4,999 annually. The average and median incomes earned by youth have increased since 1995, and in 2000 the average income for youth was $10,182, up from $9,1874. Youth also have a higher incidence of low income in private households than the overall Canadian population.
Youth aged 15 to 17 have a low-income incidence of 16% and youth aged 18 to 24 have a low-income incidence of 22%5. While the average income for youth increased, young men continue to make a higher average wage than do young women. In 2000, young men had an average income of $11,273 and young women had an average of $9,0466.
Figure 5-2: Income Distribution for Youth, 1995 and 2000
Source: Statistics Canada, 2001 Census: 97F0020XCB01001
Figure 5-3: Average and Median Incomes by sex (15-24), 1995 and 20007
Source: Statistics Canada, 2001 Census: 97F0020XCB01001
Youth earnings have continued to fall throughout the 1990s relative to the earnings of adults, prolonging a trend that began in the late 1970s and early 1980s with the entry of the baby boom generation into the labour market. The continued decline of relative earnings in the 1990s may be related to the weakness of the overall labour market. However, with the recent improvements in the labour market, there have been some indications that the relative earnings of youth may be rallying. Young women's earnings have improved relative to earnings of young men since the early 1980s, but women's earnings are still well below those of men.
5.3 Education and Income
A higher level of education also translates into higher wages. The greatest wages for youth are earned by those with some form of post-secondary diploma or degree, and the gap between the earnings of men and women also decreases as levels of education rise (with the exception of trades certificates). In 2000, the average income for a university graduate was $14,015, compared to an average income of $6,608 for youth without a high school diploma8.
Figure 5-4: Average Incomes for Levels of Educational Attainment, 2000
Please note the standard error of average income ($) for all categories.9
Source: Statistics Canada, 2001 Census: 97F0020XCB01001
Earning premiums from higher education among young workers grew from 1995 to 2000, suggesting that growth in demand for more educated youth has been broadly in balance with the increasing flow of young post-secondary graduates. From 1995 to 2000, average incomes for college graduates rose from $12,386 to $14,159, and average incomes for university graduates rose from $11,875 to $14,01510. There is a considerable earnings premium on a university degree, especially for women. In 2000, female university graduates had approximately 35% higher average earnings than women with a high school diploma. The earning premium was 26% for male university students compared to male high school graduates11.
5.4 Low Income Youth
A substantial proportion of the Canadian population lives in a low-income situation. In 2000, one in five Canadians, or 20% of the population, had incomes that fell below Statistics Canada's Low Income Cut-Offs (LICO). The definition of low income is defined by the "LICO lines", and is defined as a family unit with income below the cut-off for its family size and urbanization classification is considered a "low income family" and any family equal to or above the LICO is classified as "other"12.
5.4.1 Low Income in Canada
In total, 769,205 young people between 15 and 24 years of age were living below Statistics Canada's 2000 low-income cut-off based on before-tax income, down from 904,585 five years earlier13. While the number of youth residing in private households increased 4% between 1995 and 2000, the number of youth living in low-income decreased 15%14.
Figure 5-5: Incidence of low incomes for Canadians, 1995 and 2000
Source: Statistics Canada, 2001 Census: 97F0020XCB01006
In 2000, older youth aged 18 to 24 had the highest incidence of low income15 among all Canadians at 22%16. Children under 15 had the second highest incidence of low income at 19% followed by seniors aged 70 and over at 18%.The incidence of low income among teens 15 to 17 was 16%, almost 6 percentage points below that of older youth and almost a full percentage point below the rate of all Canadians at 16%.
1 For more information on how Statistics Canada defines income, refer to 2001 Census Dictionary.
2 Statistics Canada, 2001 Census: 97F0020XCB01001
3 Statistics Canada, 2001 Census: 95F0431XCB1004 and 97F0020XCB01001.
4 Standard error of average income in 1995 was $12 and $15 in 2000. Statistics Canada, 2001 Census: 97F0020XCB01001
5 Statistics Canada, 2001 Census: 97F0020XCB01006
6 Statistics Canada, 2001 Census: 97F0020XCB01001
7 Please note standard errors of average income ($) for men (1995=20, 2000=25), women (1995=14, 2000=15) and both sexes (1995=12, 2000=15).
8 Standard error of average income for university graduate is $54 and for incomplete high school diploma is $17. Statistics Canada, 2001 Census: 97F0020XCB01001
9 Standard of error for average incomes ($) for incomplete high school: men=26, women=19, both=17
Standard of error for average incomes ($) for high school and some post-secondary: men=50, women=22, both=28
Standard of error for average incomes ($) for trades certificate: men=91, women=74, both=63
Standard of error for average incomes ($) for college diploma: men=71, women=46, both=40
Standard of error for average incomes ($) for university degree: men=95, women=64, both=54
10 Standard error of average income ($) for college graduate is 1995=38, 2000=40, and for university graduate is 1995=68, 2000=54. Statistics Canada, 2001 Census: 97F0020XCB01001
11 Statistics Canada, 2001 Census: 97F0020XCB01001
12 Statistics Canada. Low income cut-offs. December 1999, Catalogue No.: 13-551-XIB.
13 Statistics Canada, 2001 Census: 97F0020XCB01006.
14 The following data is based on individuals (other than foreign residents) who reside in a private household and do not have a usual place of residence elsewhere in Canada. Excluded from low income statistics are individuals living in Canada's three territories, in institutions and on Indian reserves.
15 Defined by Statistics Canada, the incidence of low income is the proportion or percentage of economic families or unattached individuals in a given classification below the low income cut-offs. These incidence rates are calculated from unrounded estimates of economic families and unattached individuals 15 years of age and over. Incidence rates are calculated from estimates of families and unattached individuals after rounding is applied.
16 This paragraph has been sourced from Statistics Canada, 2001 Census: 97F0020XCB01006.
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