Is Canada Better Off Than the U. S.?

At Bloomberg Justin Fox argues that most people are better off in Canada than they are in the U. S.:

Defenders of the U.S. approach can point, though, to the fact that per-capita gross domestic product has remained higher in the U.S. than in all but a few small nations with unique characteristics (Qatar, Luxembourg, Singapore, Switzerland, Norway, etc.) — so much higher that even with the less-equal income distribution here, most Americans continue to have higher incomes than their peers in other large, affluent countries.

Times may be changing, though, and international income comparisons are definitely getting more precise. Five years ago, David Leonhardt and Kevin Quealy of the New York Times showed using numbers from the Luxembourg Income Study Database that the median income in Canada had caught up with that of the U.S. as of 2010, and speculated that Canada had probably passed the U.S. since. (The median is the income of a person in the middle of the income distribution, with as many people earning more as earning less.)

Now there’s more evidence. A report released this summer by the Centre for the Study of Living Standards, an Ottawa nonprofit, contends that as of 2016 Canada had in fact pulled ahead of the U.S. in median household income, with a $59,438 to $58,849 advantage in U.S. dollars if (and this is a reasonably big if) you use the Canadian government statistical agency’s formula for converting Canadian dollars into U.S. ones. The study also compares incomes in every percentile of the income distribution, and finds that up through the 56th percentile Canadians are better off than their U.S. counterparts.

I wouldn’t be surprised if that were correct. Canada has one tremendous advantage over the United States: it has the U. S. to act as backstop and buffer. Our high defense spending means that Canada’s may be less than it would otherwise be. Canadians who are dissatisfied with what their domestic health care system provides for them can always come here. The reverse is not true. If Americans started seeking treatment in Canada in numbers, they would quickly overwhelm the Canadian system. The Canadians have convince me of that. Just look into their arguments against allowing Americans to purchase their pharmaceuticals in Canada.

Maybe we should emulate Mexico and, rather than blocking migrants across our southern border, facilitate the movement of those migrants into Canada. Look how much better off they could be!

5 comments… add one
  • steve Link

    “Canadians who are dissatisfied with what their domestic health care system provides for them can always come here.”

    But in fact they rarely do. Canadians having care here mostly consists of Canadians who work in the US (think Detroit) who have care in the US since they are already here and it is convenient, especially if they work at a US health care facility or they have an emergency while visiting.

    https://theincidentaleconomist.com/wordpress/meme-busting-canadians-regularly-come-to-the-us-for-care/

    Steve

  • According to the Fraser Institute, a Canadian think tank, about 50,000 Canadians seek health care in the U. S. per year and the number is increasing pretty rapidly. That’s a bit more than .1% so not a huge percentage but still quite a few.

    The point remains that we provide a safety valve for Canada and there’s nothing comparable for us.

  • steve Link

    I have to assume that you dont know how the (very right leaning) Fraser Institute generates its statistics. It does it by surveying physicians and asking them to make estimates. Their rate of return on their surveys is low. Physicians responding to the survey dont have to provide any evidence to support their claims. No serious health care writer would use their numbers or would at least put up front the very obvious issues with this kind of survey.

    You can still make the case that we provide services that Canada doesn’t have to provide, like very high end pediatric surgery. That is pretty limited in the US also. However, they could send those kids to a number of quality places in the UK, Germany or France. If anything, I think that this probably shows that Canada is being fiscally prudent in how it spends its money on health care.

    https://www.ctvnews.ca/health/63-000-canadians-left-the-country-for-medical-treatment-last-year-fraser-institute-1.3486635

    Steve

  • All I know is that statistics on how many Canadians use U. S. health care are hard to come by. The article you cite quotes the Fraser Institute, too, so it may be one of the very few places that produces such statistics.

    Checking how many Canadians use UK or French health care is a good idea but I suspect that those statistics are even harder to come by. Nonetheless I may look into it.

    I should also mention that you are instantiating the “genetic fallacy”, a form of ad hominem argument. The political leanings of an organization say nothing about the truth value of a proposition. Proving that they lie outright would but that doesn’t seem to be your claim.

  • steve Link

    The first article I cited that used hard data from multiple sources did not quote the Fraser Institute. The second article quotes the Fraser Institute, but then goes on to describe how they generate their numbers and why you probably shouldn’t accept them at face value.

    “The political leanings of an organization say nothing about the truth value of a proposition. Proving that they lie outright would but that doesn’t seem to be your claim.”

    My claim, and I can cite other examples if you really want, is that their “studies” largely consist of opinion surveys that they send out to physicians, and they generally have low response rates with their surveys. It is important to know the bias of the institute as all of their published studies with this method somehow always confirm their preferred policy preferences. Hence, you should never take a study from Fraser at face value, not because they are left or right leaning, but because they use a very poor, sloppy study method which they use to support their preferences, not because they are actually doing research to find facts.

    Steve

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