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The Maturation of Canada's Retirement Income System: Income Levels, Income Inequality and Low Income Among the Elderly

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  • Myles, John

Abstract

This paper revisits trends in the level and distribution of income among Canadian seniors in the context of what is arguably the major source of change in these trends since the end of the seventies, the maturation of Canada's public and private earnings-related pension systems. The expanded role of earnings-related pensions in the 1980s and 1990s is largely the result of changes that occurred in the 1950s and 1960s. The Canada and Quebec Pension Plans (C/QPP) were implemented in 1966 and the first cohort to receive full C/QPP benefits turned 65 in 1976. Cohorts retiring after this period were also the beneficiaries of the expansion of private occupational pensions that took place between the 1950s and the 1970s. The author relies on a detailed decomposition of income by source to show that not only did the maturation of these earnings-related programs produce a substantial increase in average real incomes but also to a substantial reduction in income inequality among the elderly, due mainly to C/QPP benefits. Rising real incomes went disproportionately to lower income seniors contributing to the well-known decline in low-income rates among the elderly.

Suggested Citation

  • Myles, John, 2000. "The Maturation of Canada's Retirement Income System: Income Levels, Income Inequality and Low Income Among the Elderly," Analytical Studies Branch Research Paper Series 2000147e, Statistics Canada, Analytical Studies Branch.
    • Handle: RePEc:stc:stcp3e:2000147e
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    File URL: https://www150.statcan.gc.ca/n1/en/catalogue/11F0019M2000147
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    References listed on IDEAS

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    Cited by:

    1. Rene Morissette & Xuelin Zhang & Marie Drolet, 2004. "The Evolution of Wealth Inequality in Canada, 1984-1999," Microeconomics 0401004, University Library of Munich, Germany.
    2. Michael R. Veall, 2007. "Which Canadian Seniors Are Below the Low-Income Measure?," Social and Economic Dimensions of an Aging Population Research Papers 186, McMaster University.
    3. Picot, Garnett & Myles, John, 2005. "Income Inequality and Low Income in Canada: an International Perspective," Analytical Studies Branch Research Paper Series 2005240e, Statistics Canada, Analytical Studies Branch.
    4. Lynn McDonald & A. Leslie Robb, 2003. "The Economic Legacy of Divorced and Separated Women in Old Age," Quantitative Studies in Economics and Population Research Reports 384, McMaster University.
    5. Heisz, Andrew, 2007. "Income Inequality and Redistribution in Canada: 1976 to 2004," Analytical Studies Branch Research Paper Series 2007298e, Statistics Canada, Analytical Studies Branch.
    6. Can Verberi & Muhittin Kaplan, 2024. "An Evaluation of the Impact of the Pension System on Income Inequality: USA, UK, Netherlands, Italy and Türkiye," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 174(3), pages 905-931, September.
    7. Drolet, Marie & Zhang, Xuelin & Morissette, Rene, 2002. "The Evolution of Wealth Inequality in Canada, 1984-1999," Analytical Studies Branch Research Paper Series 2002187e, Statistics Canada, Analytical Studies Branch.
    8. 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.
    9. Picot, Garnett & Myles, John, 2005. "L'inegalite du revenu et le faible revenu au Canada : une perspective internationale," Direction des études analytiques : documents de recherche 2005240f, Statistics Canada, Direction des études analytiques.
    10. Garry F. Barrett & Yi-Ping Tseng, 2008. "Retirement Saving in Australia," Canadian Public Policy, University of Toronto Press, vol. 34(s1), pages 177-193, November.
    11. Robert Andersen & M. McIvor, 2013. "GINI Country Report: Growing Inequalities and their Impacts in Canada," GINI Country Reports canada, AIAS, Amsterdam Institute for Advanced Labour Studies.
    12. Long Mo & Jacques Légaré & Leroy Stone, 2006. "The Diversification and the Privatization of the Sources of Retirement Income in Canada," Social and Economic Dimensions of an Aging Population Research Papers 159, McMaster University.
    13. Morissette, Rene & Ostrovsky, Yuri, 2006. "Pension Coverage and Retirement Savings of Canadian Families, 1986 to 2003," Analytical Studies Branch Research Paper Series 2006286e, Statistics Canada, Analytical Studies Branch.
    14. Kevin Milligan, 2008. "The Evolution of Elderly Poverty in Canada," Canadian Public Policy, University of Toronto Press, vol. 34(s1), pages 79-94, November.
    15. Picot, Garnett & Larochelle-Cote, Sebastien & Myles, John, 2008. "Securite et stabilite du revenu a la retraite au Canada," Direction des études analytiques : documents de recherche 2008306f, Statistics Canada, Direction des études analytiques.
    16. Picot, Garnett & Larochelle-Cote, Sebastien & Myles, John, 2008. "Income Security and Stability During Retirement in Canada," Analytical Studies Branch Research Paper Series 2008306e, Statistics Canada, Analytical Studies Branch.
    17. Malcolm Hamilton, 2001. "The Financial Circumstances of Elderly Canadians and the Implications for the Design of Canada’s Retirement Income System," 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 225-253, Centre for the Study of Living Standards.
    18. Andrejs Skaburskis, 2004. "Decomposing Canada's Growing Housing Affordability Problem: Do City Differences Matter?," Urban Studies, Urban Studies Journal Limited, vol. 41(1), pages 117-149, January.
    19. Marcelin Joanis & Edgard Rodriguez, 2013. "Public Redistribution and Inequality in a Period of Fiscal Consolidation: A Decomposition Analysis for Canada in the 1980s and 1990s," Economic Papers, The Economic Society of Australia, vol. 32(2), pages 218-238, June.
    20. Van Vliet, Olaf & Been, Jim & Caminada, Koen & Goudswaard, Kees, 2011. "Pension reform and income inequality among the elderly in 15 European countries," MPRA Paper 32940, University Library of Munich, Germany.

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