The Retirement Incentive Effects of Canada's Income Security Programs

Michael Baker, Jonathan Gruber and Kevin Milligan

Social and Economic Dimensions of an Aging Population Research Papers from McMaster University

Abstract: Like most other developed nations, Canada has a large income security system for retirement that provides significant and widely varying disincentives to work at older ages. Empirical investigation of their effects has been hindered by lack of appropriate data. We provide an empirical analysis of the retirement incentives of the Canadian Income Security (IS) system using a new and comprehensive administrative data base. We find that the work disincentives inherent in the Canadian IS system have large and statistically significant impacts on retirement. This suggests that program reform can play some role in responses to the fiscal crises these programs periodically experience. We also demonstrate the importance of controlling for lifetime earnings in retirement models. Specifications without these controls overestimate the effects of the IS system. Finally, our estimates vary in sensible ways across samples lending greater confidence to our estimates.

Keywords: retirement; income security (search for similar items in EconPapers)
JEL-codes: H55 J26 (search for similar items in EconPapers)
Pages: 54 pages
Date: 2001-11
New Economics Papers: this item is included in nep-lab and nep-ltv
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12)

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Related works:
Journal Article: The retirement incentive effects of Canada's Income Security programs (2003)
Journal Article: The retirement incentive effects of Canada's Income Security programs (2003)
Working Paper: The Retirement Incentive Effects of Canada's Income Security Programs (2001)
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