Study: Who are the working women in Canada’s top 1%? Presentation to the CRDCN Webinar Series Friday, March 8, 2019 Elizabeth Richards

What do we know about high-income Canadians? Over the last few decades, top income shares in Canada have increased substantially, nearly matching the gains in the United States (Saez and Veall 2005) Previous work has shown that high-income Canadians, mainly men, are more likely than the general population to obtain a higher level of education, to work in health or senior management and to work longer hours (Lemieux and Riddell 2015)

What do we know about gender differences for high-income workers? Since the 1980s, paper floor for women, defined as women being more likely than men to drop out of top income groups, became less important (Guvenen, Kaplan and Song, 2014) Study by Fortin, Bell and Böhm (2017) shows that the underrepresentation of women in top earnings groups accounts for half or more of the gender pay gap in Canada, Sweden and the United Kingdom and even when accounting for age, education, occupation and industry, the share of the gap remains important, and has widened over time Expanding on these findings, a recent study simulates gender gaps for different scenarios, and finds that vertical differences within industries - women not reaching same income groups as men within industries - is central to persistence of gender pay gap in Canada (Bonikowska, Drolet and Fortin 2019)

Analytical questions and data Knowledge gap in the literature: What are the socio-economic characteristics of working women in the top 1%? How do they differ from men in the same income bracket? Are there any income differences? Are there any differences in hours of paid or unpaid work? Data: 2016 Census data allows detailed socio-economic profile of workers in the top 1%, a relatively small population, while 2006 Census provides long-term context Administrative data sources used to provide high-quality income information on 2016 Census Total income selected, which includes self-employment and investment income, income groups mutually exclusive (bottom 90%, next 5%?, next 4%, top 1%) Selected workers with $270, 900 or more in total income

Women represented one in five workers in the top 1% in 2015

Widest educational gender gaps for top 1% observed in architecture, engineering and related technologies

Widest occupational gender gaps observed in management and health

Working women in the top 1% were less likely than their male counterparts to be married or in a common-law relationship

Working women in the top 1% had fewer children than their male counterparts

Gender gaps in income wider for senior managers

Differences in hours worked emerged between women and men in the top 1% with children

Working women in the top 1% spending substantially more time on unpaid work than their male counterparts

Key findings Women have taken a different path than men in reaching top income groups Notable occupational gender gaps observed, which have become more entrenched over the last decade, as women in the top 1% were more likely to work in health, typically as physicians, while men were more likely to work in management, especially at senior levels Persistent gender disparities in family status and number of children, as working women in the top 1% were less likely to be in a couple or to have children (had fewer when they did) These family dynamics are reflected in hours worked, as unattached women and men worked similar hours, while gender differences emerged for those in couples or with children Finally, working women in the top 1% had lower incomes than their male counterparts, with notable gender gaps in senior management and business, while gaps in health, where salaries are more influenced by government policies, were narrower

Questions? Elizabeth Richards elizabeth.richards@canada.ca 613-863-4323

References Atkinson, A.B, Casarico, A. and S. Voitchovsky, 2016. Top Incomes and the Gender Divide. Melbourne Institute Working Paper Series. Melbourne Institute Working Paper No. 27. Victoria, Melbourne Institute of Applied Economic and Social Research. Bonikowska, A., M. Drolet, and Fortin, N.M. 2019. “Earnings Inequality and the Gender Pay Gap in Canada: The Role of Women’s Under-representation Among Top Earners”. Economic Insights. Ottawa: Statistics Canada. Forthcoming. Fortin, N, Bell, B. and M. Böhm, 2017. “Top Earnings Inequality and the Gender Pay Gap: Canada, Sweden, and the United Kingdom”. Labour Economics 47: 107-123. Guvenen, F., G. Kaplan, and J. Song. 2014. The Glass Ceiling and the Paper Floor: Gender Differences among Top Earners, 1981-2012. NBER Working Paper Series, no. 20560. Cambridge, Massachusetts: National Bureau of Economic Research. Lemieux. T., and Riddell, W.C. 2015. “Who are Canada’s Top 1 Percent”. Institute for Research on Public Policy. Income Inequality, The Canadian Story, Volume V. Statistics Canada. 2013. Education and Occupation of high-income Canadians. National Household Survey. Statistics Canada Catalogue no. 99-014-X2011003. Ottawa: Statistics Canada. UN Women. 2018. Turning Promises into Action: Gender Equality in the 2030 Agenda for Sustainable Development. New York, N.Y.: UN Women. Available at: http://www.unwomen.org/en/digital- library/publications/2018/2/gender-equality-in-the-2030-agenda-for-sustainable-development-2018 (accessed May 10, 2018).

Appendix

Data Total Income Bottom 90% Next 5% Next 4% Top 1% Employment wages and salaries Self-employment income Investment income Retirement income from private sources Government transfers 2016 Census data allows detailed socio-economic profile of workers in the top 1%, a relatively small population, while 2006 Census provides long-term context Administrative data sources used to provide high-quality income information on 2016 Census Income groups are mutually exclusive (see below) Bottom 90% (below $105,000) Next 5% (between $105,000 and 135,900) Next 4% (between $135,900 and $270,900) Top 1% ($270,900 or more)