Poverty in Canada and the United States: measurement, trends, and implications

Although Canada and the United States are two of the richest countries in the world, many Canadians and Americans perceive themselves, and are perceived by others, to be poor which raises the issue of how best to measure poverty. Within Canada, there are widespread worries that the self-image of Canada as a place with relatively little poverty (somewhat 'kinder and gentler' than the United States), may be a bit outdated (see Graves, Dugas, and Beauchamp 1999; Angus Reid 1999). Poverty in Canada has been rising, while in the United States it has been falling in recent years which raises the issues of why that has been happening and what it will mean, in the longer term, for Canada and the United States as a whole. In this paper, therefore, I begin by asking how poverty in affluent countries should be measured, before examining recent evidence on poverty intensity and its social significance. In section 1 the use of the Sen-Shorrocks-Thon index of poverty intensity is advocated, and the 'Poverty Box' is introduced as a summary graphical representation. In section 2 recent data are presented on poverty in Europe and North America, and it is noted that between 1994 and 1997 Canadian provinces became quite similar to many U.S. states in poverty intensity. A fixed effects model is used in section 3 to examine whether changes in trade exposure, the unemployment rate, unemployment insurance, and social assistance are significant determi-