This thesis studies various distributional eﬀects of social transfers and taxation for Canada
over the 1993-2008 period using the longitudinal Survey of Labour and Income Dynamics
(SLID). It is comprised of four chapters. Chapter 1 examines how changes in the receipt of
program beneﬁts, due to reforms in government transfer programs, have aﬀected the income
distribution. Chapter 2 examines the relationship between the post- to pre-ﬁscal ratio of
income instability, and measures of ﬁscal progressivity and indicators of social insurance.
Chapter 3 studies the inequality-reducing role of the tax/transfer system; and chapter 4
presents estimates of earnings dynamics accounting for education.
In chapter 1 we apply a nonparametric reweighting decomposition method that reﬂects
changes in the probability of receiving program benefits from 1996 to 2006. This method
identiﬁes the redistributive role played by transfer programs, and where in the distribution
these programs have their greatest eﬀects. We ﬁnd reforms to Social Assistance (SA) reduced
its redistributive eﬀectiveness, while Child Beneﬁts, Employment Insurance (EI) and Old Age
Security became more redistributive.
Chapters 2 and 3 decompose the variance of income into a long- and a short-term component as in the literature on earnings dynamics, using a ﬁve-year rolling window structure.
Chapter 2 examines the relationship of the post- to pre-ﬁscal ratio of income instability (E-ratio) with a measure of ﬁscal progressivity, and indicators of social insurance.We find the E-ratio increased substantially after 1998, indicating a turn toward less progressivity, a pattern driven mainly by families with low education earners.
The E-ratio of income long-term inequality (permanent variance) is examined in chapter 3. We ﬁnd the tax/transfer system reduces the permanent variance for earners with less than High School. The provision of SA is more eﬀective in reducing long-term inequality
than EI. Chapter 4 presents the ﬁrst estimates of earnings dynamics accounting for education and
using the SLID for Canada. Instability and inequality are the greatest for the less educated, and grew rapidly in the late 1990s. Since 2001, inequality increased among earners with college and university degrees.