It also investigated these patterns on the basis of broad geographic regions within both countries. The study rejected a theory that increasing economic integration has lead to greater similarity in patterns of income distribution in the two countries. Rather, the results suggested a widespread difference in overall income distribution in both Canada and the United States. If anything, the differences appeared to be widening, at least up to 1997. Income inequality in United States has risen more rapidly While Canadian and American societies are similar in many respects, their levels and trends in income inequality have been quite different during the past two decades.
Real incomes are higher and have been growing faster in the United States on average.
However, income inequality is higher in the United States, and it has been rising more rapidly. Government transfer programs have had a substantially equalizing impact on family income distributions on both sides of the border. In fact, between 1974 and 1985, the American transfer system appeared more redistributive than Canada's. However, between 1985 and 1997, government transfer programs in Canada generally had larger impacts. Individual income and payroll taxes have also had an equalizing impact on the distribution of family income on both sides of the border.