Labour Market Matters - February 2014
The income security of retired Canadians has become an increasing challenge for Canadian policy makers. There has been a significant decline in the coverage of workplace pensions in the private sector and a dramatic shift in the structuring of private-sector pensions away from defined-benefit plans and towards defined contribution plans over the past 20 years. Meanwhile, life expectancies are continuing to rise, which implies that pensions and retirement income need to last longer. Retirement income programs are also facing the retirement of 8 million baby boomers leaving the labour force over the next 15 years (out of a labour force of 18.7 million in 2007). These factors can be expected to place severe financial pressures on retirement income schemes, with implications for the economic well-being of oncoming retirees. The Guaranteed Income Supplement (GIS) benefit is targeted to help seniors with the intention of raising the incomes of those without sufficient resources of their own or from other government sources to an acceptable level. A CLSRN study by Ross Finnie (University of Ottawa), David Gray (University of Ottawa) and Yan Zhang (Statistics Canada) entitled â€œThe Receipt of Guaranteed Income Supplement (GIS) Status Among Canadian Seniors â€“ Incidence and Dynamicsâ€ (CLSRN Working Paper no. 115) measures the incidence of receipt of GIS payment among those over 65 in Canada and the dynamics of entries and exits from this state. Income in retirement â€“ whether from public or private pensions, savings or employment â€“ is an important determinant of the quality of life for Canadians leaving the workforce. A CLSRN paper entitled â€œHow do the level and composition of income change after retirement? Evidence from the LADâ€ (CLSRN Working Paper no. 114), by Ross Finnie (University of Ottawa) and Byron G. Spencer (McMaster University), uses a unique dataset that allows the authors to follow individuals from their prime working years into retirement. They find that while incomes drop sharply at retirement, the longer term rates of income replacement are relatively stable over the retirement period.
|Date of creation:||27 Feb 2014|
|Date of revision:||27 Feb 2014|
|Contact details of provider:|| Web page: http://www.clsrn.econ.ubc.ca/ |
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