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Poverty Among Senior Citizens: A Canadian Success Story

In: The State of Economics in Canada: Festschrift in Honour of David Slater

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  • Lars Osberg

Abstract

Lars Osberg makes the case in his paper that the major success story of Canadian social policy in the twentieth century has in fact been the reduction of poverty among senior citizens. According to Osberg, the poverty rate, defined with the poverty line measured as one-half median equivalent income after taxes and transfers, for households headed by a person 65 or over fell from 28.4 per cent in 1973 to 5.4 per cent in 1997, while the poverty gap or income shortfall below the poverty line fell from 26.2 per cent to 15.8 per cent over the same period. In contrast, the elderly poverty rate and gap before tax and transfer income are much higher and show no downward trend. Osberg attributes the difference between the before and after transfers and taxes poverty rate and gap to the introduction of the Old Age Security in 1952 and Guaranteed Income Supplement in 1968 and the reduction in poverty after 1973 to the maturing of the Canada/Quebec Pension Plan regimes established in 1966. Osberg notes that income trends capture only part of the improvement in well-being enjoyed by seniors over the past several decades. Many of the current elderly population received significant capital gains from a large run up in housing prices in the 1970s and 1980s. In addition, the elderly have not been hit by the labour market insecurity that has affected the non-elderly, particularly youth, in the 1980s and 1990s. They have also greatly benefited from the introduction of universal medicare. Osberg also finds that relative to the United States, Sweden and the United Kingdom, Canada has done the best job in boosting the income levels of seniors above the poverty line. In his view, Canada has done a remarkable job in ensuring that senior citizens receive an income sufficient to prevent poverty.

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Bibliographic Info

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This chapter was published in: Patrick Grady & Andrew Sharpe (ed.) The State of Economics in Canada: Festschrift in Honour of David Slater, Centre for the Study of Living Standards, pages 151-181, 2001.

This item is provided by Centre for the Study of Living Standards in its series The State of Economics in Canada: Festschrift in Honour of David Slater with number 08.

Handle: RePEc:sls:secfds:08

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Related research

Keywords: Poverty; Elderly Poverty; Canada; Retirement; Income; Low Income; Low-income; Wealth; Capital Gains;

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References

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  1. Kuan Xu & Lars Osberg, 2000. "The Social Welfare Implications, Decomposability, and Geometry of the Sen Family of Poverty Indices," Department of Economics at Dalhousie University working papers archive sendeco, Dalhousie, Department of Economics.
  2. Osberg, L & Xu, K, 1997. "International Comparisons of Poverty Intensity : Index Decomposition and Bootstrap Inference," Department of Economics at Dalhousie University working papers archive 97-03, Dalhousie, Department of Economics.
  3. Lars Osberg, 1998. "Economic Insecurity," Discussion Papers 0088, University of New South Wales, Social Policy Research Centre.
  4. Michael Baker & Gary Solon, 2003. "Earnings Dynamics and Inequality among Canadian Men, 1976-1992: Evidence from Longitudinal Income Tax Records," Journal of Labor Economics, University of Chicago Press, vol. 21(2), pages 267-288, April.
  5. Osberg, Lars & Erksoy, Sadettin & Phipps, Shelley, 1998. "How to Value the Poorer Prospects of Youth in the Early 1990s?," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 44(1), pages 43-62, March.
  6. Sen, Amartya K, 1976. "Poverty: An Ordinal Approach to Measurement," Econometrica, Econometric Society, vol. 44(2), pages 219-31, March.
  7. Osberg, L & Xu, K, 1997. "International Comparisons of Poverty Intensity : Index Decomposition and Bootstrap Inference," Department of Economics at Dalhousie University working papers archive 97-03, Dalhousie, Department of Economics.
  8. Zheng, Buhong, 1997. " Aggregate Poverty Measures," Journal of Economic Surveys, Wiley Blackwell, vol. 11(2), pages 123-62, June.
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Citations

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Cited by:
  1. William B. P. Robson, 2001. "Six Pillars of Social Policy: The State of Pensions and Health Care in Canada," The State of Economics in Canada: Festschrift in Honour of David Slater, in: Patrick Grady & Andrew Sharpe (ed.), The State of Economics in Canada: Festschrift in Honour of David Slater, pages 183-224 Centre for the Study of Living Standards.
  2. Michael R. Veall, 2007. "Which Canadian Seniors Are Below the Low-Income Measure?," Quantitative Studies in Economics and Population Research Reports 414, McMaster University.
  3. Kevin Milligan, 2007. "The Evolution of Elderly Poverty in Canada," Social and Economic Dimensions of an Aging Population Research Papers 170, McMaster University.
  4. Robson, William, 2006. "Accounting for and Thinking about Social Security Liabilities in Canada," Discussion Paper 285, Center for Intergenerational Studies, Institute of Economic Research, Hitotsubashi University.
  5. repec:crr:crrwps:2004-25 is not listed on IDEAS
  6. Michael R. Veall, 2008. "Canadian Seniors and the Low Income Measure," Canadian Public Policy, University of Toronto Press, vol. 34(s1), pages 47-58, November.

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