--- canonical_url: "https://csls.ca/ipm-archive/issue-2/determinants-of-trends-in-living-standards-in-canada-and-the-united-states-1989-2000/" title: "Determinants of Trends in Living Standards in Canada and the United States, 1989-2000" author: name: "CSLS" url: "https://csls.ca/author/cslc/" date_published: "2026-07-10T09:12:55+00:00" date_modified: "2026-07-13T06:38:07+00:00" post_type: "ipm" summary: "" ipm_issue_period: - "Spring 2001" ipm_keyword: - "1990s" - "Canada" - "GDP per capita" - "labour market" - "labour productivity" - "living standards" - "personal income" - "productivity gap" - "United States" ipm_research_theme: - "Well-being and living standards" ipm_country_focus: - "Canada" - "United States" featured_image: "https://csls.ca/wp-content/uploads/2026/06/IPM_50_banner.webp" status: "publish" --- # Determinants of Trends in Living Standards in Canada and the United States, 1989-2000 Canonical URL: https://csls.ca/ipm-archive/issue-2/determinants-of-trends-in-living-standards-in-canada-and-the-united-states-1989-2000/ # Determinants of Trends in Living Standards in Canada and the United States, 1989-2000 [Download full PDF article](https://csls.ca/wp-content/uploads/2026/07/IPM-Issue-2-1-Sharpe.pdf) Cite this article × Cite this article as: Sharpe, Andrew. 2001. “Determinants of Trends in Living Standards in Canada and the United States, 1989-2000.” International Productivity Monitor, No. 2 (Spring 2001): 3–10. https://www.csls.ca/ipm-archive/issue-2/determinants-of-trends-in-living-standards-in-canada-and-the-united-states-1989-2000/ ## Author: - Andrew Sharpe Centre for the Study of Living Standards (CSLS) ## IPM Issue 2 Spring 2001 pp. 3–10 ## Related IPM articles [The Relationship between Efficiencies Defenses for Mergers and TFP Growth Robin Shaban Fall 2025 | IPM Issue 49 | pp. 82–102](https://csls.ca/ipm-archive/ipm-issue-49/the-relationship-between-efficiencies-defenses-for-mergers-and-tfp-growth/) [Labour Productivity as a Measure of Technological Change Ulrich Kohli Fall 2025 | IPM Issue 49 | pp. 64–81](https://csls.ca/ipm-archive/ipm-issue-49/labour-productivity-as-a-measure-of-technological-change/) [Appendix: Variable Definitions and Country/Sector Coverage for Regulatory Reform Analysis Gilbert Cette, Jimmy Lopez, Giuseppe Nicoletti, Océane Vernerey Fall 2025 | IPM Issue 49 | pp. 1–18](https://csls.ca/ipm-archive/ipm-issue-49/appendix-variable-definitions-and-country-sector-coverage-for-regulatory-reform-analysis/) [The Potential Impact of Pro-competitive Regulatory Reforms on Productivity and Growth in Canada Gilbert Cette, Jimmy Lopez, Giuseppe Nicoletti, Océane Vernerey Fall 2025 | IPM Issue 49 | pp. 3–40](https://csls.ca/ipm-archive/ipm-issue-49/the-potential-impact-of-pro-competitive-regulatory-reforms-on-productivity-and-growth-in-canada/) [IPM Issue 49 Editors’ Overview Andrew Sharpe, Bart van Ark, Paul Schreyer Fall 2025 | IPM Issue 49 | pp. 1–2](https://csls.ca/ipm-archive/ipm-issue-49/) [De-industrialization and the Great Productivity Slowdown: What Comes Next? 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Bart van Ark, Klaas de Vries, Abdul Erumban Spring 2024 | IPM Issue 46 | pp. 38–59](https://csls.ca/ipm-archive/ipm-issue-46/are-intangibles-running-out-of-steam/) ## Abstract ## Résumé EN FR Copy link Email LinkedIn This article examines why the Canada–U.S. living standards gap widened considerably in the 1990s. Using three measures—real GDP per capita, real personal income per capita, and real personal disposable income per capita—it shows Canadian living standards fell from 86 per cent of U.S. levels in 1989 to 78.5 per cent by 2000. The analysis decomposes growth rates into demographic, employment, and productivity components, finding that poor labour market performance drove divergence in 1989–96, while lagging productivity growth dominated from the mid-1990s onward. Since 1996, Canada’s growth rate has recovered but the income gap has remained substantial. Cet article examine pourquoi l’écart de niveau de vie entre le Canada et les États-Unis s’est considérablement creusé dans les années 1990. À l’aide de trois mesures — le PIB réel par habitant, le revenu personnel réel par habitant et le revenu personnel disponible réel par habitant — il montre que le niveau de vie canadien est passé de 86 % du niveau américain en 1989 à 78,5 % en 2000. L’analyse décompose les taux de croissance en composantes démographiques, d’emploi et de productivité, et constate que la faible performance du marché du travail a été le moteur de la divergence en 1989-1996, tandis que le retard de croissance de la productivité a dominé à partir du milieu des années 1990. Depuis 1996, le taux de croissance du Canada s’est redressé, mais l’écart de revenu est demeuré important. [Download full PDF](https://csls.ca/wp-content/uploads/2026/07/IPM-Issue-2-1-Sharpe.pdf)