A new study from Statistics Canada, “Family wealth across the generations”, examines changes in family wealth from 1984 to 1999. It finds that not all families benefited equally from the two economic booms during the 15-year period.

During the period covered by the study, the Canadian economy experienced a recovery from the 1981-1982 recession, another recession in 1990-1991, and then another recovery.

Even though some generations of families saw their wealth increase more than others, overall inequality in wealth remained unchanged. Equity in the principal residence, the single largest component of wealth of families in all family groups, helped to reduce wealth inequality.

From 1984 to 1999, families whose major income recipient was born in the 1940s, 1950s or 1960s made substantial gains in wealth. However, those in which the major income recipient was older (born before 1930) incurred a loss.

Gains in wealth reflected the acquisition of non-financial assets, such as a house or a business, and of financial assets, such as stocks, mutual funds or savings in tax-sheltered registered plans.

Families in the older groups experienced a decline in wealth as they liquidated some assets because of a drop in income or changed demographics.

The median wealth of families with a major income recipient born in the 1960s rose from $3,100 in 1984 to $40,500 in 1999. In contrast, median wealth fell from $129,100 to $125,000 among families in which the major income recipient was born in the 1920s.

This is consistent with the well-known pattern of wealth being low for younger families and peaking in the pre-retirement years. Wealth is the value of an individual’s or family’s assets net of any debts.

During this period, the proportion of families with $500,000 or more in wealth doubled from 4% to almost 9%, although their share of total wealth increased only from 35% to 49%.