Gini Index
Definition:
Adjusted household after-tax income distribution as a deviation from perfect equality.
Methods and Limitations:
The Gini index is a measure of income inequality. The Gini index measures how much an income distribution deviates from perfect equality. Values of the Gini index can range from 0 to 1. A value of 0 denotes a perfectly equal distribution in a population, where all units receive exactly the same amount of income. A value of 1 denotes a perfectly unequal distribution, where one unit has all of the income in the economy.
For the census, Gini index values are calculated for three types of adjusted household income—market income, total income and after-tax income. Adjusted income is computed by dividing the household income by a factor equal to the square root of the household size (known as the equivalence scale). This adjustment for different household sizes takes into account economies of scale. It reflects the fact that the needs of a household increase, but at a decreasing rate, as the number of members increases.
The boundaries and names of census geographies can change from one census to the next. In order to facilitate data comparisons between censuses, previous census data have been adjusted to reflect as closely as possible the 2021 boundaries of these areas.
For the 2021 Census, government transfers include benefits from temporary government income programs intended to provide financial support to individuals affected by the COVID-19 pandemic and the public health measures implemented to minimize the spread of the virus (Census 2021 Metadata – Footnote 10 and 26). This financial support is accounted for in 2020 individual and household incomes.
COVID-19 benefits helped to offset losses in employment income among low wage earners, accelerate growth in household after-tax income, particularly among families with children, and reduce income inequality and the low-income rate.
For more information, see Statistics Canada’s Pandemic Benefits Cushion Losses and Narrow Income Inequality.
Source:
Statistics Canada. Table 98-10-0097-01 Income inequality statistics across Canada: Canada, provinces and territories, census metropolitan areas and census agglomerations with parts
Data is updated on Vital Victoria as it becomes available from the data providers.
Gini Index in the Sustainable Development Goals
Click on the SDG to reveal more information
10. Reduce inequality within and among countries
The international community has made significant strides towards lifting people out of poverty. The most vulnerable nations – the least developed countries, the landlocked developing countries and the small island developing states – continue to make inroads into poverty reduction. However, inequality still persists and large disparities remain in access to health and education services and other assets.
Additionally, while income inequality between countries may have been reduced, inequality within countries has risen. There is growing consensus that economic growth is not sufficient to reduce poverty if it is not inclusive and if it does not involve the three dimensions of sustainable development – economic, social and environmental.
To reduce inequality, policies should be universal in principle paying attention to the needs of disadvantaged and marginalized populations.