SEDAP: Research Paper Abstracts (2006)

  1. The Portfolio Choices of Hispanic Couples
    Deborah A. Cobb-Clark and Vincent A. Hildebrand

  2. This paper analyzes the portfolio allocations of couple-headed, Hispanic families using Survey of Income and Program Participation (SIPP) data. Our results reveal that Hispanic couples as a group are less wealthy than otherwise similar white couples, although there is substantial variation across Hispanic-origin groups. Much of the disparity in portfolio choices of Hispanic relative to whites appears to stem from these lower wealth levels. Accounting for these wealth disparities, Hispanic couples hold less financial wealth, but more real estate and business equity than do white couples.

  3. Inter-provincial Migration of Income Among Canada's Older Population: 1996-2001
    K. Bruce Newbold

  4. Much of the literature on internal migration in Canada has focused on the determinants of migration, as opposed to the impacts. Yet, it is likely that migration has a large impact upon the distribution and re-distribution of income across regions. Such impacts may be magnified within the older population, as their relocation involves the transfer of savings such as pensions, retirement investments, or other income supplements from province to province. Using methods proposed by Plane (1999), income-based versions of demographic effectiveness and efficiency are applied to evaluate the movement of non-earned income in the Canadian context among Canada's older population. The analysis uses data drawn from the 2001 Census, and focuses upon the older population (aged 60+ in 2001), distinguishing between three types of income, including (i) Old Age Security and Guaranteed Income Supplements; (ii) Canada/Quebec pension plan benefits; and (iii) Retirement Investment income. In addition to evaluating the magnitude of income redistribution, the impact of primary, return, and onward migration on regional income distributions is also evaluated, illustrating the importance of return migration in transferring incomes over space.

  5. Joint Taxation and the Labour Supply of Married Women: Evidence from the Canadian Tax Reform of 1988
    Thomas F. Crossley and Sung-Hee Jeon

  6. The Canadian federal tax reform of 1988 replaced a spousal tax exemption with a non-refundable tax credit. This reduced the "jointness" of the tax system: after the reform, secondary earners' effective "first dollar" marginal tax rates no longer depended on the marginal tax rates of their spouses. In practice, the effective "first dollar" marginal tax rates faced by women with high income husbands were particularly reduced. Using difference-in-difference estimators, we find a significant increase in labour force participation among women married to higher income husbands.

  7. What Ownership Society: Debating Housing and Social Security Reform in the United States
    Daniel Béland

  8. This article explores President George W. Bush's "ownership society" blueprint in comparative and historical perspective. By taking the "ownership society" seriously, it is possible to understand how it is deeply rooted in the American cultural repertoire, and how it offers a coherent neo-liberal discourse aimed at constructing the "need to reform" existing social policy legacies in the sense of a greater reliance on private savings and ownership. Although grounded in the American repertoire, President Bush's "ownership society" is inspired by a foreign model: Thatcher's "popular capitalism," another neo-liberal blueprint that featured a similar celebration of personal ownership. Discussing Thatcherism briefly before analyzing the debate over President Bush's "ownership society" in the fields of housing and pensions, this article underlines the relationship between ideational processes and institutional legacies in policy-making.

  9. Home Cooking, Food Consumption and Food Production among the Unemployed and Retired Households
    Matthew Brzozowski and Yuqian Lu

  10. Utilizing the 1996 Canadian Food Expenditure survey matched with Canadian Nutrient File, we separate actual food consumption from observed expenditure and test the Permanent Income/Life Cycle Hypothesis on the true consumption data. We find that the lower food expenditure during periods of unemployment or retirement (previously reported in the literature), does not translate into poorer nutrition. Household calorie intake and major nutrient intake seem to be unaffected by changes in employment status. We find evidence that unemployed or retired households substitute food purchased from restaurants for food purchased for at home consumption. Further, with the 1998 Time Use Survey we find that individuals who are not employed devote more time for food preparation. Finally we present limited evidence that unemployed and retired households substitute precooked meals for meals made from primary ingredients.

  11. The Long-Run Cost of Job Loss as Measured by Consumption Changes
    Martin Browning and Thomas F. Crossley

  12. The costs of involuntary job loss are of substantial research and policy interest. We consider the measurement of the cost of job displacement with household expenditure data. With a Canadian panel survey of individuals who experienced a job separation, we compare the consumption growth of households that experienced a permanent layoff to a control group of households that experienced a temporary layoff with known recall date. Because the firms employing the latter group are providing insurance, these workers approximate a bench mark of full insurance against job loss shocks. We estimate that permanent layoffs experience an average consumption loss of between 4 and 10 percent. Older workers and workers with high job tenure have losses closer to the top of this range.

  13. Do the Rich Save More in Canada?
    Sule Alan, Kadir Atalay, and Thomas F. Crossley

  14. This paper is an attempt to answer the long standing question of whether households with higher lifetime income save a larger fraction of their income. The major difficulty in empirically assessing the relationship between lifetime incomes and saving rates is to construct a credible proxy for lifetime income. The Canadian Family Expenditure Survey (FAMEX) provides us with both unusually good data on savings rates and potential instruments with which we can construct reliable lifetime income proxies. Our empirical analysis suggests that the estimated relationship between saving rates and lifetime incomes is sensitive to the instrument used to proxy lifetime income. Nevertheless, our preferred estimates indicate that, except for poorest households (who simply do not save), saving rates do not differ substantially across lifetime income groups.

  15. Income Inequality over the Later-Life Course: A Comparative Analysis of Seven OECD Countries
    Robert L. Brown and Steven G. Prus

  16. This paper examines income inequality over stages of the later-life course (age 45 and older) and systems that can be used to mitigate this inequality. Two hypotheses are tested: (i) Levels of income inequality decline during old age because public benefits are more equally distributed than work income; (ii) Because of the progressive nature of government benefits, countries with stronger public income security programs are better able to reduce income inequalities during old age.

    The analysis is performed by comparing age groups within seven OECD countries (Canada, Germany, the Netherlands, Norway, Sweden, the United Kingdom, and the United States) using Luxembourg Income Study data. Both hypotheses are supported. Several conclusions are drawn from the findings.

  17. The Social Cost-of-Living: Welfare Foundations and Estimation
    Thomas F. Crossley and Krishna Pendakur

  18. We present a new class of social cost-of-living indices and a nonparametric framework for estimating these and other social cost-of-living indices. Common social cost-of-living indices can be understood as aggregator functions of approximations of individual cost-of-living indices. The Consumer Price Index (CPI) is the expenditure-weighted average of first-order approximations of each individual’s cost-of-living index. This is troubling for three reasons. First, it has not been shown to have a welfare economic foundation for the case where agents are heterogeneous (as they clearly are.) Second, it uses an expenditure-weighted average which downweights the experience of poor households relative to rich households. Finally, it uses only first-order approximations of each individual’s cost-of-living index, and thus ignores substitution effects.

    We propose a “common-scaling” social cost-of-living index, which is defined as the single scaling to everyone’s expenditure which holds social welfare constant across a price change. Our approach has an explicit social welfare foundation and allows us to choose the weights on the costs of rich and poor households. We also give a unique solution for the welfare function for the case where the weights are independent of household expenditure. A first order approximation of our social cost-of-living index nests as special cases commonly used indices such as the CPI. We also provide a nonparametric method for estimating second-order approximations (which account for substitution effects).

  19. The Top Shares of Older Earners in Canada
    Michael R. Veall

  20. Within the 65+ age group, the percentage of labour market income received by the top 1% of earners has increased from about 30% in 1982 to more than 60% in 2002. The trend is smooth, is roughly uniform across provinces and does not appear to have been accelerated by top marginal tax rate reductions in 1988. Hence there is little evidence from this time series that further marginal tax rate reductions would have an important permanent effect on aggregate labour supply for this age group. Moreover, it is unlikely that this period could provide evidence regarding aggregate labour supply effects for this group with respect to reductions in Old Age Security or Guaranteed Income Supplement clawbacks, because the top 1% of earners are above the income range served by these programs.

  21. Le soutien aux personnes âgées en perte d'autonomie: jusqu'où les baby-boomers pourront-ils compter sur leur famille pour répondre à leurs besoins ?
    Jacques Légaré, Carolyne Alix, Yves Carrière, Janice Keefe

  22. Projection of future needs for home care services typically uses current utilisation patterns and population ageing. Accurately assessing this need is much more complex since disability patterns among the elderly are changing and availability of caregivers is affected by changes in family structure. This paper projects annual growth rates between 2001-2031 in the need for informal and formal support among elderly in Quebec and discusses the policy implications of the increasing demand for informal caregivers. Using Statistics Canada Life Paths micro-simulation model, these projections incorporate disability rates and the upcoming availability of informal caregivers. The authors conclude that continued focus on family to meet the needs of elderly without increased formal support is not sustainable in the long term.

  23. Les générations X et Y du Québec, vraiment différentes des précédentes ?
    Jacques Légaré, Pierre-Olivier Ménard

  24. Many myths surround the Generation X members. Among them, the term "McJobs" is often used to describe the difficulties they have experienced on the labour market. It is justified to claim that they had a more complicated career path in comparison with other generations. However, what is really going on? Who are they really? This paper paints a portrait of both the Generation X, whose members were born between 1965 and 1975, and of their successors, the members of the Generation Y, who were born between 1975 and 1985. More precisely, this research will put emphasis on some highlights about the behaviour of the X and Y in Quebec contemporary society. This study will examine the themes of family, their attitude toward the labour market and saving. In order to have a better understanding of the extent of the differences observed, both groups will be compared with the baby boomers [who were divided in two subgroups, the old boomers (1945-1954) and the young boomers (1955-1964)].

    The research findings coming from this analysis are numerous. We learn, among other things, that the X and the Y have fairly different behaviours than the baby boomers. Overall, these two birth cohorts had to go through a clearly less comfortable situation than the baby boomers. However, we also learn that the situation experienced by the young boomers, in some areas, is not very distant from what the Generation X is going through. However, the X will have to invest a lot in order to face retirement issues.

  25. The Diversification and the Privatization of the Sources of Retirement Income in Canada
    Long Mo, Jacques Légaré, Leroy Stone

  26. Recent labour market developments in the context of population ageing have generated many changes concerning sources of retirement income. More precisely, this paper, which is based on two Statistics Canada surveys (Survey of Consumer Finances and Survey of Labour and Income Dynamics,) will look at the processes of diversification and privatisation of income sources of Canada’s retirees during the period 1980-2002. This study has used the concept of individualized income based on the economic family in order to consider economies of scale and revenue sharing. An appropriate assessment of the composition of retirement income sources has been realized, while discerning five distinct categories: net government transfer payments, CPP/QPP benefits, private pensions, investment income and employment income. The situation of older women living alone and of older immigrants has been more carefully analyzed in order to detect some particularities among those two vulnerable groups. The results of this study demonstrate that retirees’ income composition has undergone many changes. In addition, sources of retirement income have become substantially more diversified and privatized during the period under study. These adjustments are becoming essential in western societies in order to overcome the obstacles caused by population ageing that could disrupt pension systems.

  27. Evaluating Pension Portability Reforms: The Tax Reform Act of 1986 as a Natural Experiment
    Vincenzo Andrietti and Vincent A. Hildebrand

  28. This paper uses the Tax Reform Act of 1986 as a natural experiment to evaluate the job mobility response of prime-aged US employees participating in employer sponsored defined benefit pension plans to a reduction in the vesting period for pension rights accrual. We apply difference-in-differences methods using data from the Survey of Income and Program Participation to estimate the treatment impact of this policy change. We find that on average the reform had no significant effects on voluntary job mobility of the treated group. Our findings are robust to the use of different control groups and difference-in-differences estimators.

  29. Estimating a Collective Household Model with Survey Data on Financial Satisfaction
    Rob Alessie, Thomas F. Crossley, and Vincent Hildebrand

  30. We estimate a collective household model with survey data on financial satisfaction from the European Community Household Panel. Our estimates suggest that cohabitating individuals enjoy returns to scale in consumption that are towards the larger end of the range of estimates reported in the literature. They also suggest that the share of household income provided by the female partner is a significant determinant of her share of household consumption in most of the countries we study.

  31. Physician Labour Supply in Canada: a Cohort Analysis
    Thomas F. Crossley, Jeremiah Hurley, and Sung-Hee Jeon

  32. This paper employs cohort analysis to examine the relative importance of different factors in explaining changes in the number of hours spent in direct patient care by Canadian general/ family practitioners (GP/FPs) over the period 1982 to 2002. Cohorts are defined by year of graduation from medical school. The results for male GP/FPs indicate that: there is little age effect on hours of direct patient care, especially among physicians aged 35 to 55; there is no strong cohort effect on hours of direct patient care; but there is a secular decline in hours of direct patient care over the period. The results for female GP/FPs indicate that: female physicians on average work fewer hours than male physicians; there is a clear age effect on hours of direct patient care; there is no strong cohort effect; there has been little secular change in average hours of direct patient care. The changing behaviour of male GP/FPs accounted for a greater proportion of the overall decline in hours of direct patient care from the 80’s through the mid 90’s than did the growing proportion of female GP/FPs in the physician stock.

  33. Tax Incentives and Household Portfolios: A Panel Data Analysis
    Sule Alan and Søren Leth-Petersen

  34. This paper investigates the responsiveness of household portfolios to tax incentives by exploiting a substantial tax reform that altered after-tax returns and cost of debt for a large number of households. An extraordinary panel data set that covers two years before and after the reform is used for the analysis. Our empirical findings suggest that households reshuffle their balance sheets in the case of a partial deductibility phase-out. In particular, heavily taxed, interest-bearing assets are used to pay off mortgage debt. Furthermore, we find that taxes have a significant impact on the structure of household portfolios even after controlling for unobserved heterogeneity.

  35. The Healthy Immigrant Effect and Immigrant Selection: Evidence from Four Countries
    Steven Kennedy, James Ted McDonald, and Nicholas Biddle

  36. The existence of a healthy immigrant effect – where immigrants are on average healthier than the native-born – is now a well accepted phenomenon. There are many competing explanations for this phenomenon including health screening by recipient countries, healthy behaviour prior to migration followed by the steady adoption of new country (less) healthy behaviours, and immigrant self-selection where healthier and wealthier people tend to be migrants. We explore the last two of these explanations for the healthy immigrant effect by examining the health outcomes, health behaviours, and socio-economic characteristics of immigrants from a range of source countries in the US, Canada, UK and Australia. We find evidence of strong positive selection effects for immigrants from all regions of origin in terms of education. However, we also find evidence that self-selection in terms of unobservable factors is an important determinant of the better health of recent immigrants.

  37. Well-Being Throughout the Senior Years: An Issues Paper on Key Events and Transitions in Later Life
    Margaret Denton, Karen Kusch

  38. Social Development Canada’s mission is “to strengthen Canada’s social foundations by supporting the well-being of individuals, families and communities and their participation through citizen focused policies, programs and services” (Social Development Canada 2005a). Well-being is a concept that goes beyond good health to encompass physical and mental fitness as well as social fitness (being able to perform one’s social roles and the demands of everyday living adequately). As people age, they experience a number of transitions in their lives. They may retire, change residence, loose a spouse, become a caregiver, and/or develop a health problem or disability. These transitions, especially when they occur around the same time, may impact on their well-being and independence and prevent them from being contributing members of society.

    This paper summarizes the research on what we currently know about the key events and transitions experienced by seniors, their impacts, and the resources seniors have or need to successfully cope with these events throughout the senior years. It will also review what we know about opportunities, gaps or barriers in accessing social support programs and service delivery designed to assist seniors in coping successfully with adverse events and life transitions. Issues to be considered include availability, access and costs of community support and home health care services.

    Finally, the paper will attempt to provide potential policy research directions to address current knowledge gaps. This is an extensive literature, and we have limited the scope by focusing on the last 10 years of Canadian research published in Journals and by Statistics Canada. We have favored research based on national studies in this review, though there are many excellent case studies and qualitative studies that add texture to our knowledge. Recognizing that the senior population is a very heterogeneous group, this review will examine (where the research permits) differences by senior life-course stages, and other target groups such as women, the disabled, visible minority, immigrants, Aboriginal peoples, sub-regions, low income, and persons living alone. This review of the literature has shown that while we have basic information about many of the transitions in seniors’ lives, there is very little information about the various life course stages or about various sub groups of society.

  39. Satisfied Workers, Retained Workers: Effects of Work and Work Environment on Homecare Workers' Job Satisfaction, Stress, Physical Health, and Retention
    Isik U. Zeytinoglu, Margaret Denton

  40. The goal of this project was to assist health system managers and policy makers develop policies and strategies to recruit and retain human resources in the homecare sector and have a satisfied, healthy workforce. The overall research question was: How do the work characteristics of homecare workers and the work environment in homecare contribute to job satisfaction, stress, physical health, and retention?

    The research is designed as a mixed-method approach with both qualitative and quantitative data. Results showed that restructuring and organizational change in the homecare sector has contributed to both mental and physical health problems (including job stress and musculoskeletal disorders), job dissatisfaction, and retention problems. Factors that contribute to higher levels of satisfaction and the propensity to stay with the organization include organizational and peer support, working one-on-one with clients, doing emotional labour (that is, the work involved in dealing with other people’s feelings), and satisfaction with schedules, pay, and benefits. This study also examined the association between job flexibility and job insecurity and self-reported musculoskeletal disorders and found no relationship between these variables and musculoskeletal disorders.

  41. Contrasting Inequalities: Comparing Correlates of Health in Canada and the United States
    Hugh Armstrong, Wallace Clement, Zhiqiu Lin, and Steven Prus

  42. Comparative health studies consistently find that Canadians on average are healthier than Americans. Comparing health status within and between Canada and the United States provides key insights into the distribution of inequalities in these two countries. Canada’s universal health care insurance system contrasts with the mixed system of the United States: universal care for seniors, private health care insurance for many, and no or intermittent coverage for others. These countries are also notably different in the extent of income and racial/ethnic inequalities. It is within this context that this study compares the relative strength of the relationships between social, economic, and demographic factors (sex, age, marital status, income, education, country of birth, and race/ethnicity) and health status in Canada and the United States. Evidence drawn from the 2002-2003 Joint Canada/United States Survey of Health reveals that the correlations between these factors, above all country of birth and race/ethnicity, and health are relatively stronger in the United States, reflecting differences in health care access and racial/ethnic-based inequalities between the countries. The study findings are suggestive of the effects of universal access to health care and more equitable distribution of other social resources in protecting the health of the general population.

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Last revised: Dec 21, 2006.