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Reforming Old Age Security: Effects and Alternatives

Author

Listed:
  • Nicholas-James Clavet

    (Universite Laval, Quebec)

  • Jean-Yves Duclos

    (Universite Laval, Quebec)

  • Bernard Fortin

    (Universite Laval, Quebec)

  • Steeve Marchand

    (Universite Laval, Quebec)

Abstract

The federal government announced in its 2012 budget its intention to increase the age of eligibility for old age security and the guaranteed income supplement from 65 to 67 years. The increase will be introduced gradually, beginning in 2023. When the policy is fully implemented in 2030, it will increase the net revenues of the federal government by $7.1 billion per year, but reduce net provincial revenues by $638 million (in constant 2014 dollars). Assuming no change in labour and savings behaviour, delaying the date of eligibility will also increase the percentage of individuals aged 65 and 66 years who are in the low-income group, from 6 percent to 17 percent (for an additional 100,000 low-income seniors in this age group), and will be most harmful to low-income seniors and to women. Alternative reforms to old age security could make it possible to achieve net gains for public finances without having such large negative impacts on the low-income rate among seniors.

Suggested Citation

  • Nicholas-James Clavet & Jean-Yves Duclos & Bernard Fortin & Steeve Marchand, 2015. "Reforming Old Age Security: Effects and Alternatives," Canadian Tax Journal, Canadian Tax Foundation, vol. 63(2), pages 357-373.
    • Handle: RePEc:ctf:journl:v:63:y:2015:i:2:p:357-373
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    Cited by:

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    2. Cathal O'Donoghue & Gijs Dekkers, 2018. "Increasing the Impact of Dynamic Microsimulation Modelling," International Journal of Microsimulation, International Microsimulation Association, vol. 11(1), pages 61-96.

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    Keywords

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    JEL classification:

    • C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts

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