Research summary: Multidimensional Poverty: Evidence from Canadian Households’ survey data

Official title: Multidimensional poverty: Evidence from Canadian households' survey data

Author of the report: Sid Ali Amedah

Why this study

Poverty is not just about having too little income. Poverty means not having access to work, a secure home, education, and good health. This study develops a multidimensional poverty measure and analysis methodology. It uses different dimensions in the analysis and does not set a firm hypothesis in advance. The study aims to show the importance of identifying households that have different types of deprivations that lead to poverty. Identifying these households will help to connect them to the right policies.

What we did

We used data from the 2021 Statistics Canada Survey of Household Spending (SHS). This survey contains detailed information about how households spend money and accurate income data for household members based on tax records. It also has information about household demographics such as:

• the type and condition of homes (for example, tenure, housing adequacy, suitability, and affordability)
• household equipment
• employment status of household members, and
• their educational attainment

We used factor analysis to develop a poverty indicator based on many possible dimensions. Factor analysis is a statistical method that looks for relationships among large sets of observable variables.

To identify households that were poor in several dimensions, we use a clustering method. This method is helpful because it does not require setting a fixed poverty line.

Finally, we used a logistic regression model to look at factors that make a person more likely to belong to the poor group or not.

What we found

The factor analysis identified 4 types of poverty which explained over 80% of the variance:

• education deprivation
• financial deprivation
• housing deprivation
• health deprivation

Cluster analysis results showed that about 13.1% of Canadian households lived in multidimensional poverty in 2021. This means that they faced serious problems in areas such as in education, finance, housing, and health. One-person households have the highest multidimensional poverty rate at 26.8% with lone parent households next at 16.2%.

What it means

This study will help inform the Canadian Poverty Reduction Strategy. It shows that deprivations in education, finance, housing, and health are important contributors to poverty in Canada. It confirms that many different types of deprivations need to be looked at to fully understand poverty. People who face poverty need policies that work together to support them.

Contact us

For access to the full report, please contact us using the email address below.

Strategic and Service Policy Branch, Social Policy Directorate, Social Research Division

Email: esdc.nc.sspb.research-recherche.dgpss.cn.edsc@esdc-edsc.gc.ca