Poverty rates among racialized groups differ across generations

Using data from Canada’s 2021 Census of Population, a new study released by Statistics Canada on August 23, 2023, examines the differences in the poverty rate between 11 racial minority groups and the White population.

The information on the differences in the poverty rates and how they vary across generations helps to highlight the vast diversity in the economic well-being of different population groups. The study revealed several key findings, including the underlying sociodemographic factors that may account for these differences.

Poverty rates are highest among most racial minority groups

Overall, poverty was more prevalent among most racial minority groups than among the White population.

Of the 11 racial minority groups, 10 had higher poverty rates than the White population group, although the differences with the White population were narrower for some groups (e.g., South Asian, Japanese) and wider for others (e.g., Arab, West Asian, and Korean), before and after controlling for sociodemographic characteristics. The one exception was the Filipino group, which had a comparatively lower rate of poverty.

Sociodemographic differences among population groups

Compositional differences in the sociodemographic characteristics of racial minority groups accounted for some of their observed differences in the poverty rate relative to the White population.

For instance, the share of persons under 25 years of age was particularly high among the Black (42%) and Arab (42%) population groups, compared with the White population group (25%). The share of immigrants ranged from 56% for the Black population group to 79% for the West Asian population group, compared with 11% among the White population group. 

Across generations, the difference in the observed gap in the poverty rate relative to the White population decreased for some groups, but not for others.

The Filipino population group is notable for having had lower poverty rates than the White population group across all generations. They had the highest number of earners in the family in all three generations, and this advantage tended to offset their disadvantage in immigration status and age structure.

For the Arab population group, the gaps in the poverty rates relative to the White population group decreased in each successive generation but persisted into the third-plus generation. Compositional differences, mostly age structure and the recency of the first generation, accounted for around one-third to two-thirds of the gaps in the poverty rate relative to the White population, depending on the generation.

Decreases in poverty rates were observed from the first to the second generation for the Black, Latin American, and West Asian population groups, but the gaps relative to the White population were largest in the third-plus generation. Differences in sociodemographic characteristics accounted for two-thirds to three-quarters of the large gaps relative to the White population group for third-plus generation Black, Latin American, and West Asian groups.

Digging deeper into the data

The results from this study at least partly reflect the special circumstance of 2020—the year when the poverty status was measured for the 2021 Census.

The national poverty rate in 2020 was 44% lower than the 2015 rate. This decrease was driven largely by higher government transfers in 2020, including the enhanced Canada Child Benefit (CCB) and temporary COVID-19 pandemic relief benefits.

The decrease was even larger among some racial minorities, including the Filipino, West Asian, Arab, and Black groups. Clearly, the enhanced CCB and temporary pandemic relief benefits affected various racial minority groups differently, likely because of their different demographic compositions and patterns of labour market engagement.

Nevertheless, the general patterns of group differences in the poverty rate relative to the White population across generations observed in the 2021 Census were broadly similar to those observed in the 2016 Census, although the magnitudes of these differences changed.

In sum, racial minority groups differed considerably in their poverty experiences and the associated factors.

The effects of some influential factors, such as recency among the first generation and the very young age structure among the second and third-plus generation of racial minority groups, are further analyzed in the full study: Poverty among racialized groups across generations.