IDEAS home Printed from https://ideas.repec.org/a/cpp/issued/v48y2022is2p22-34.html
   My bibliography  Save this article

Replacement Rates of Public Pensions in Canada: Heterogeneity across Socio-Economic Status

Author

Listed:
  • Nicholas-James Clavet
  • Mayssun El-Attar
  • Raquel Fonseca

Abstract

Several income sources can help retirees maintain their welfare and consumption levels once they leave the workforce. One source is public pensions. Their importance as an income source varies greatly according to socio-economic status (SES). In this article, we analyze how replacement rates (RRs) of public pensions (Old Age Security and Guaranteed Income Supplement) and mandatory public pension benefits (Canada/Quebec Pension Plan [C/QPP]) vary across SES by using the Longitudinal and International Study of Adults dataset. Taking advantage of the longitudinal nature of this survey, we compute and compare average RRs by SES. We specifically consider the role of education and health to understand variations in RRs. Our results show that the average RR of public pensions for individuals in bad health is 32 percent, whereas for those who report being in good health, it is 21 percent. When public pensions and C/QPP benefits are included, these percentages become 54 percent for those in bad health and 41 percent for those in good health. When estimating a multivariate regression model and controlling for past income, we look at couples and find that past income does not eliminate differences in RR by education level and health status. Our results suggest that assortative matching could play a role in explaining the variation in RRs across individuals' education.

Suggested Citation

  • Nicholas-James Clavet & Mayssun El-Attar & Raquel Fonseca, 2022. "Replacement Rates of Public Pensions in Canada: Heterogeneity across Socio-Economic Status," Canadian Public Policy, University of Toronto Press, vol. 48(S2), pages 22-34, November.
    • Handle: RePEc:cpp:issued:v:48:y:2022:i:s2:p:22-34
    DOI: 10.3138/cpp.2022-030
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.3138/cpp.2022-030
    Download Restriction: access restricted to subscribers
    File URL: https://libkey.io/10.3138/cpp.2022-030?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Keywords

    replacement; retirement; Canadian public pensions; LISA; health status;
    All these keywords.

    JEL classification:

    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cpp:issued:v:48:y:2022:i:s2:p:22-34. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Iver Chong The email address of this maintainer does not seem to be valid anymore. Please ask Iver Chong to update the entry or send us the correct address (email available below). General contact details of provider: https://www.utpjournals.press/loi/cpp .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.