The Effect of RRSPs on Savings in Canada
AbstractDo Registered Retirement Savings Plans (RRSPs) increase savings? It is unclear whether they are largely "savings-creating" (i.e. generate new savings) or are largely "savings-diverting" (i.e. the repository for shifted existing assets or for savings that would have been made without the plans). While the increase in Canadian private saving relative to that in the United States in the early seventies is sometimes taken as evidence for the view that RRSPs are savings-creating, we present a number of arguments which reduce confidence in that conclusion. Further microdata studies of similar programs in the United States yield conflicting conclusions. We find that perhaps the best approach attempted in the United States, examining savings before and after a change in program limits, is not likely to be useful in Canada as publicly-available microdata suggest that few taxpayers are constrained by RRSP limits. Given that RRSPs tend largely to benefit higher-income households, the lack of good evidence that they increase savings may influence consideration of such issues as to whether RRSP limits should be increased, although the importance of the RRSP program in providing horizontal equity between members of Registered Pension Plans and nonmembers must be acknowledged.
Download InfoTo our knowledge, this item is not available for download. To find whether it is available, there are three options:
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
Bibliographic InfoPaper provided by McMaster University in its series Independence and Economic Security of the Older Population Research Papers with number 14.
Length: 37 pages
Date of creation: May 1997
Date of revision:
Contact details of provider:
Postal: 1280 Main Street West, Hamilton, Ontario, L8S 4M4
Phone: (905) 525-9140 ext. 22765
Fax: (905) 521-8232
Web page: http://www.mcmaster.ca/economics/
More information through EDIRC
Find related papers by JEL classification:
- D10 - Microeconomics - - Household Behavior - - - General
- H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
This paper has been announced in the following NEP Reports:
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Michael R. Veall, 2001.
"Did tax flattening affect RRSP contributions?,"
Canadian Journal of Economics,
Canadian Economics Association, vol. 34(1), pages 120-131, February.
- Michael R. Veall, 1999. "Did Tax Flattening Affect RRSP Contributions?," Quantitative Studies in Economics and Population Research Reports 342, McMaster University.
- Michael R. Veall, 1999. "Did Tax Flattening Affect RRSP Contributions?," Social and Economic Dimensions of an Aging Population Research Papers 3, McMaster University.
- Michael R. Veall, 1999. "Did Tax Flattening Affect RRSP Contributions?," Department of Economics Working Papers 1999-04, McMaster University.
- John Burbidge & Deborah Fretz & Michael R. Veall, 1998. "Canadian and American Saving Rates and the Role of RRSPs," Canadian Public Policy, University of Toronto Press, vol. 24(2), pages 259-263, June.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If references are entirely missing, you can add them using this form.