Public Pensions and Low Income Dynamics in Canada

Mayssun El-Attar and Raquel Fonseca ()

Cahiers de recherche / Working Papers from Chaire de recherche sur les enjeux économiques intergénérationnels / Research Chair in Intergenerational Economics

Abstract: This paper focuses on individuals over 50 and shows that considering persistence and low income dynamics is essential to understanding poverty. We use administrative data for Canada from the Longitudinal and International Study of Adults (LISA). The paper shows that poverty for seniors is highly persistent and strongly depends on lifetime earnings. We show that beginning to receive a public pension implies a higher probability of exit from poverty. Public pensions thereby help to explain the lower overall incidence of poverty among the elderly. These results are confirmed in a dynamic probit model, which allows to control for individuals’ unobserved heterogeneity and state dependence. While public pensions do not eliminate poverty among older adults, they help to alleviate it by reducing persistence and increasing exit for those who are most at risk.

Keywords: low-income; elderly; poverty dynamics; Canadian public pensions. (search for similar items in EconPapers)
JEL-codes: H55 I32 J26 (search for similar items in EconPapers)
Date: 2020
New Economics Papers: this item is included in nep-age, nep-lma and nep-pbe
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http://creei.ca/wp-content/uploads/2020/02/cahier_ ... _dynamics_canada.pdf

Related works:
Journal Article: Public pensions and low-income dynamics in Canada (2023)
Working Paper: Public Pensions and Low Income Dynamics in Canada (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:rsi:creeic:2002

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