Definition and Measurement of Asset Poverty in Canada

Principal Investigator:  David Rothwell
Funding Source: Social Sciences and Humanities Research Council of Canada


Poverty is a most complex social problem with controversial definitions, various measures, and unclear causes. Canadian poverty has been extensively studied from an income-based framework based on relative (the Low Income Cutoffs (LICOs) and the Low Income Measures (LIMs)) or absolute thresholds (the Market Basket Measure (MBM)). Poverty scholars outside Canada have begun to focus on non-income dimensions of economic well-being such as asset ownership. Assets are financial and non-financial stocks of wealth (e.g., saving, investments, home equity, vehicles, business capital, etc.). The asset-based framework suggests that asset holding positively influences individual, family, and community well-being in ways that income does not (Sherraden, 1991). Furthermore, scholars have estimated asset poverty rates in the US (Haveman & Wolff, 2005).  An asset-based perspective is, however, largely absent from poverty discourse in Canada. This project fills this gap by defining, measuring, and producing the first nationally-representative estimates of asset poverty in Canada. Four questions are addressed: (a) what is the prevalence of asset poverty?, (b) how does the prevalence of “asset poverty” compare to the prevalence of “income poverty”?, (c) how is asset poverty related to socio-demographic characteristics (ethnicity, age, immigration)?, and (d) what policies might reduce asset poverty? Secondary data from the 2005 Survey of Financial Security and the 2009 Canadian Financial Capability Survey gathered by Statistics Canada contain the variables necessary to analyze asset poverty. Data are being accessed via the Quebec Inter-University Centre for Social Statistics (QICSS) data laboratory at McGill University. Findings will lead to (1) a major contribution to the ways that Canadian scholars and citizens conceptualize poverty; (2) the first Canadian contribution to the international discourse on asset poverty; (3) social policy proposals aimed towards reducing asset poverty and social exclusion; and, (4) a long-term research agenda to understand Canadian poverty from an asset-based perspective.

Activities: Student training and preliminary data analysis.

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