In Canada, there are three main sources of government-provided retirement income: the Canada/Quebec Pension Plans (C/QPP), which have benefits and contributions based on earnings up to the Yearly Maximum Pensionable Earnings; Old Age Security (OAS), which is a fixed amount for most but does include a ‘clawback’ of benefits for high-income individuals; and the Guaranteed Income Supplement (GIS), which is designed to supplement those with extremely low income. The annual GIS benefit is reduced, or clawed back, by 50 cents for every dollar of annual income the person has in retirement, including C/QPP and income from Registered Retirement Savings Plans (RRSPs) and other savings. OAS benefits are not included in determining the GIS clawback.
The result of this is that low-income individuals who attempt to enhance their retirement replacement ratio actually see a decrease in government-provided support the more they save for retirement. In fact, savings in an RRSP can effectively be taxed at more than 100% through corresponding reductions in the GIS, social housing, home care, GAINS (Ontario's Guaranteed Annual Income Supplement), and other benefits which are based on one's personal retirement income.
This paper explores alternatives to the 50% GIS clawback, including: a basic GIS exemption, a GIS clawback rate lower than 50%, and a combination of the two. The goal is to improve the fairness of the GIS and reduce the disincentive to save for retirement, without increasing the overall cost of the program significantly.
Our research undertakes to determine the basic living expenses required by Canadian seniors living in different circumstances in terms of age, gender, city of residence, household size, homeowner or renter, means of transportation and health status. The paper develops required expenses for food, shelter, health care, transportation and miscellaneous. The research identifies the typical expenses of seniors in each of these categories. Using 2001 as our base year, we follow the US Elder Standard to build an elderly threshold for Halifax, Montreal, Toronto, Calgary and Vancouver.
The research is unique because it is the first Canadian study of absolute basic living expenses tailored to seniors, rather than simply to adults in general. This information is important to seniors, prospective retirees, financial planners, policy makers and actuaries in assessing the minimum level of income required in retirement and the adequacy of savings and income security programs.
Our conclusions suggest that individual circumstances, rather than age, are the primary drivers in determining the cost of these basic expenses. Seniors are a diverse group, particularly with respect to health, so it is important that seniors and financial planners do not blindly rely on a fixed replacement ratio or universal level of income when projecting the level of finances needed to retire. This research enables the reader to determine the threshold that is suited to a senior’s general circumstances.
China is one of the largest countries in the world in terms of both geography and population size, with lower economic levels compared to the developed countries, and great regional differences. This paper introduces the rapid demographic changes of the Chinese population and the current financial security of elders in China. The World Bank’s multi-pillar model is used to explain the financial security of elders in China, which includes the current pension and health care systems in urban and rural areas in China respectively. The important issues of financial security of elders which the Chinese government should address in the near future are also discussed. The paper concludes with a consideration of the results of social welfare system reforms by the Chinese government and future research interests from a geographer’s perspective.
This paper considers the issue of skill mismatch among immigrants and its impact on their remittance behaviour using cross-sectional data from two linked surveys in the Philippines: the Survey on Overseas Filipinos (SOF) and the Family Income and Expenditure Survey (FIES) for the years 1997, 2000, and 2003. Our main hypothesis is that skills mismatch - broadly defined here as the over-qualification of migrants in terms of educational attainment relative to occupation in their destination country - is prevalent among skilled migrants and exerts a downward pressure on the level of international remittances received by the sending economies. Accordingly, a high incidence of skill mismatch implies that the remittances expatriated would be significantly less compared to conditions of no skills mismatch. We find evidence of substantial skill mismatch, particularly among highly educated women, but there is also systematic variation in the incidence of skill mismatch by family characteristics and host country. In terms of remittances, we find that for women, higher education levels are associated with lower incidence of remittances but larger amounts remitted. However, negative skill mismatch leads to men and women both being more likely to remit money, but for women the amount is significantly less than it otherwise would have been.
Most studies analyzed the impact of decreased mobility on health and social network status, but only a few have provided evidence to understand how these latter factors could affect travel decisions or outcomes. This paper examined the linkage between people’s car driving and public transit use in Canada and their personal, health and social network characteristics, with a focus on the elderly population. The study exploits Statistics Canada’s General Social Survey (GSS-19), a unique survey with a nationally representative sample that contains questions on health, social network and transportation situation. Multilevel binary logistic regression models were estimated for the two travel modes. Results showed that regardless of age, poor health discourages both car driving and public transit use. Physical limitations that constrain mobility were found to decrease the likelihood of using public transit, a finding that was expected. However, a very interesting finding of this study is that even in the presence of physical or mental situations, mobility is still made possible through car driving. Relatedly, the study showed how important license possession and car ownership are to personal mobility and to be less dependent on other modes of transport including public transit.
Findings from this study have also underlined that family network could play an important role in influencing both mobility decisions and provision. Car driving was found to be more likely when a person lives alone versus with one or more people in the household, a tendency that is stronger among the elderly than the non-elderly group. However, in the event of voluntary driving cessation, suspension of driving license, or when other means of transport would not be a convenient or feasible option, support from family members or caregivers could be critical given that, and as this study finding showed, elderly people are likely to continue to strive to maintain their driving skills even with a health condition, rather than prepare to stop driving. The size of close family networks did not show a considerable influence, but the quality of these ties (i.e. being close to family) was found relevant in public transit use. Results underlined implications to road safety, the development of alternative transport strategies and strengthening social support to help maintain mobility necessary for health and quality of life in later years.
Community support services (CSSs) enable persons coping with health or social problems to maintain the highest possible level of social functioning and quality of life. Access to these services is challenging because of the multiplicity of small agencies providing these services and the lack of a central access point. A review of the literature revealed that most service awareness studies are marred by acquiescence bias. To address this issue, service providers developed a series of 12 vignettes to describe common situations faced by older adults for which CSSs might be appropriate. In a telephone interview, 1152 older adults were presented with a series of vignettes and asked what they would do in that situation. They were also asked about their most important sources of information about CSSs. Findings show awareness of CSSs varied by the situation described and ranged from a low of 1% to 41%. The most important sources of information about CSSs included informational and referral sources, the telephone book, doctor’s offices, and through word of mouth.
Identifying the effect of differential taxation on portfolio allocation requires exogenous variation in marginal tax rates. Marginal tax rates vary with income, but income surely affects portfolio choice directly. In systems of individual taxation – like Canada’s – couples with the same household income can face different effective tax rates on capital income when labor income is distributed differently within households. Using this source of variation we find statistically significant but economically modest responses to taxation. In a “placebo” test, using data from the U.S. (which has joint taxation), we find no effect of the intra-household distribution of labor income on portfolios.
The question as to how society should support pharmaceutical (‘pharma’) innovation is both pertinent and timely: Pharma drugs are an integral component of modern health care and hold the promise to treat more effectively various debilitating health problems. The rate of pharma innovation, however, has declined since the 1980s. Many observers question whether the patent system is capable of providing the appropriate incentives for pharma innovation and point to several promising alternative mechanisms. These mechanisms include both ‘push’ programs – subsidies directed towards the cost of pharma R&D – and ‘pull’ programs – lumpsum rewards for the outputs of pharma R&D, that is, new drugs. I review evidence why our current system of pharma patents is defective and outline the various alternative mechanisms that may spur pharma innovation more effectively.
We construct cohort working life tables for Canadian men and women aged 50 and older and, for comparison, corresponding period tables. The tables are derived using annual single age time series of participation rates for 1976-2006 from the master files of the Statistics Canada Labour Force Survey. The cohort calculations are based on stochastic projections of mortality coupled with alternative assumptions about future participation rates. Separate tables are provided for the years 1976, 1991, and 2006, thus spanning a period of substantial gains in life expectancy and strong upward trends in female participation.
Objective: To identify the extent to which differences between Inuit and other residents of Canada’s North in
a set of health behaviors and health service use related to cancer incidence and diagnosis can be accounted
for by demographic, socio-economic and geographic factors.
Study Design: Data on residents aged 21-65 who live in Canada’s North are drawn from the 2000-01 and 2004-05 Canadian Community Health Surveys and the 2001 Aboriginal People’s Survey.
Methods: Multivariate Logistic regression analysis is applied to 1) a set of health behaviors including smoking, binge drinking and obesity, and 2) a set of basic health service use measures including consultations with a physician and with any medical professional, Pap smear testing and mammography.
Results: Higher smoking and binge drinking rates and lower rates of female cancer screening among Inuit are not accounted for by differences in demographic characteristics, education, location of residence or distance from a hospital.
Conclusions: Factors specific to Inuit individuals and communities may be contributing to negative health behaviors associated with increased cancer risk, and to a lower incidence of diagnostic cancer screening. Policy interventions to address these issues may need to be targeted specifically to Inuit Canadians.
This paper takes advantage of 2006 Census data, the Aboriginal Peoples Survey (APS) and the Canadian Community Health Survey (CCHS) to highlight some basic demographic trends among Older Aboriginal Peoples, their health status and their use of health services in the first part of this paper. In the second part of the paper, we connect the findings to what has been specifically written about Older Aboriginal Peoples, their health status and use of health services. Not surprisingly both the data analysis and literature are limited because the preponderance of data, analyses and the literature have focused on younger Aboriginal Peoples. In essence, this underscores the need for more in-depth research on Older Aboriginal Peoples as the demographics and health status of Aboriginal Peoples.
The question as to how society should support pharmaceutical (‘pharma’) innovation is both pertinent and timely: Pharma drugs are an integral component of modern health care and hold the promise to treat more effectively various debilitating health problems. The productivity of the pharma R&D enterprise, however, has declined since the 1980s. Many observers question whether the patent system is conducive to pharma innovation and point to several promising alternative mechanisms. These mechanisms include both ‘push’ programs – subsidies directed towards the cost of pharma R&D – and ‘pull’ programs – lumpsum and royalty-based rewards for the outputs of pharma R&D, that is, new drugs. I review evidence why our current system of pharma patents is defective and outline the various alternative mechanisms that may spur pharma innovation more effectively.
The shift to ambulatory care, initiated in Canada’s health care system in the 1990’s, consists in reducing the length of hospitals stays, delaying institutionalization and promoting home care. However, the supply for health and social support services is flawed in that seniors living in the community do not receive all the home care assistance they report to need. Based on data from the 2002 General Social Survey, this research presents a global portrait of unmet needs for home care services in Canada. It shows that 26.8% of seniors need assistance, accounting for approximately 1,024,000 individuals. Among these, just over 180,000 (17.7%) had at least one unmet need. In nearly half the cases, elderly with unmet needs receive insufficient support for 2 activities or more. Furthermore, house cleaning, house maintenance and outdoor work are the three activities with the highest prevalence of unmet needs. Finally, the younger seniors, those who require assistance for 3 or 4 activities, and those living in Quebec and British Columbia are most likely to have unmet needs.
Quebec, as most Western societies, is facing the ageing of its population, producing many economic, political and social impacts. One solution often considered is to rely on immigration to reduce, delay or even counter certain consequences. For this purpose, replacement migration is sometimes seen as a solution: it aims to establish the number of immigrants needed to reach specific demographic targets, which are, in this study, to prevent total population decline, to prevent working-age population decline and to prevent the percentage of those 65 years and over from exceeding 25% of the total population.
The results show that it could be possible for Quebec to prevent the decline of its population if fertility does not decrease further and if immigration is well managed; that is replacement migration would not be excessively high. However, raising the immigration level too quickly could impede reaching this objective. The decline of the population aged between 20 and 64 years is inevitable: whatever the level of fertility, even if migration were much higher for the next two decades than has been planned for Quebec. Finally, immigration has no significant impact on the age structure of a population: it is quite unrealistic to expect this component to prevent the percentage of those 65 years and over in the total population from exceeding 25%. The only way to reach this objective is a rapid increase of fertility to the replacement level. This means that immigration can in no way prevent the ageing of the population or have a significant impact on the process.
The ageing of the prison population under federal responsibility is a more and more obvious phenomenon in Canadian penitentiaries, as is the increase in the number of prisoners of 50 years and over. The stakes connected with these two phenomena are many and constitute major challenges for the correctional authorities in providing health services, in finding the necessary material and financial resources, and in reorganizing the penitentiaries. This report has as its objective, on one hand to analyze the process of ageing of the prison population and, on the other, to forecast the number of prisoners of 50 years and over. This will allow us to answer our main research question: are we moving towards "penitentiary-homes"?
The data were supplied by the Correctional Service of Canada for 2001-2002 to 2006- 2007 and result from a vast data base which is constantly enriched: The Criminal Justice Information Library. From these data, several indicators were calculated. The mean and median ages of various classes of prisoners allowed us to estimate the prison ageing while the rates of flow in and out of the system make possible projections of the prison population. We found an increase of the mean and median ages of the prisoners condemned to long sentences, combined with a slight increase in the age of admittance. However both age and age at the time of admission were relatively stable for those with short sentences. These observations confirm what had been observed in the literature: the ageing of the prison population can be explained largely by the existing penal system and the increasing severity of legislated penalties. In a second step, the projections of population highlighted a net increase of the number of prisoners of 50 years and over from 2007 till 2017 if current practices persist.
So, penitentiaries have to face not only an ageing of their population but also an increase in the number of older prisoners. These two phenomena will change inexorably the organization of the federal establishments even if older prisoners remain a minority. The correctional authorities will have to adjust to this new prison reality.
In 1975, 50 year-old Americans could expect to live slightly longer than their European counterparts. By 2005, American life expectancy at that age has diverged substantially compared to Europe. We find that this growing longevity gap is primarily the symptom of real declines in the health of near-elderly Americans, relative to their European peers. In particular, we use a microsimulation approach to project what US longevity would look like, if US health trends approximated those in Europe. We find that differences in health can explain most of the growing gap in remaining life expectancy. In addition, we quantify the public finance consequences of this deterioration in health. The model predicts that gradually moving American cohorts to the health status enjoyed by Europeans could save up to $1.1 trillion in discounted total health expenditures from 2004 to 2050.
The public economic burden of shifting trends in population health remains uncertain. Sustained increases in obesity, diabetes, and other diseases could reduce life expectancy – with a concomitant decrease in the public-sector’s annuity burden – but these savings may be offset by worsening functional status, which increases health care spending, reduces labor supply, and increases public assistance. Using a microsimulation approach, we quantify the competing public-finance consequences of shifting trends in population health for medical care costs, labor supply, earnings, wealth, tax revenues, and government expenditures (including Social Security and income assistance). Together, the reduction in smoking and the rise in obesity have increased net public-sector liabilities by $430bn, or approximately 4% of the current debt burden. Larger effects are observed for specific public programs: annual spending is 10% higher in the Medicaid program, and 7% higher for Medicare.
The Expert Panel on Older Workers made recommendations designed to increase the labour force participation of older workers. We explore the implications that higher rates of older-worker participation would have for the overall size and age composition of the labour force, for the productive capacity of the economy, and for the incomes of Canadians. Our purpose is to assess the potential impact that increased participation of older workers might have in offsetting any anticipated adverse effects of population aging on standards of living.
If retirement means a substantial and sustained reduction in the time spent working for pay or profit, measurement requires a definition of substantial and sufficient observations of the same individuals to determine whether a transition from “working” to “retired” status has occurred. Using the Statistics Canada Longitudinal Administrative Databank, a 20 percent sample of the individual income tax returns of all tax filers since 1980, we identify those with significant labour force attachment at ages 50-52, and follow them year by year. If retired means having no income from employment, the median age of retirement is about 63 for men, 62 for women. That is true for all cohorts. If earning up to half of one’s previous employment income is deemed consistent with being retired, the median age is about 60 for both men and women. Results obtained in this way are consistent with calculations based on Labour Force Survey data.
In light of the entrenchment of sub-replacement fertility and the sharp increase in the stock of foreign wives in Taiwan in recent years, this research studies the reproductive contributions of Taiwan’s foreign wives from the top five source countries (China, Vietnam, Indonesia, Thailand, and the Philippines), based mainly on an application of a multinomial logit model to the micro data of the 2003 census of foreign wives.
Our main findings are as follows. First, the overall fertility level of the foreign wives was probably somewhat higher than that of the native-born women and definitely lower than the replacement level. Second, among the five nationalities, those from China were much less reproductive than those from the other countries, mainly because the former were more prone to (1) having a rather old marriage age, (2) having a very large spousal age gap, (3) being separated or divorced, (4) having their current marriage being their second marriage, and (5) having a veteran as the husband. Third, among the four Southeast Asian nationalities, those from Indonesia and the Philippines were more reproductive than those from Thailand and Vietnam. This contrast was a muted reflection of the fertility difference in countries of origin. Fourth, for every nationality, marriage duration and marriage age were the most powerful explanatory factors and must be included in the model to avoid getting misleading estimated coefficients of other less powerful explanatory factors, whereas current age was a spurious factor that should not be used in the model. Fifth, in the context of marriage duration and marriage age, the explanatory factors with rather strong explanatory powers for at least one nationality included spousal age gap, marital status, remarriage status, co-residence with parent, and wife’s employment status. Sixth, the expected negative effect of wife’s educational attainment on lifetime fertility turned out to be either non-existent or modest. In particular, it had practically no effect on the probability of being childless. These findings implied that getting better educated foreign wives could increase the quality of their children with little or no reduction in the number of their children and in their probability of being childless
Since the prevalence of many chronic health conditions increases with age we might anticipate that as the population ages the proportion with one or more such conditions would rise, as would the cost of treatment. We ask three questions: How much would the overall prevalence of chronic conditions increase in a quarter century if age-specific rates of prevalence did not change? How much would the requirements for health care resources increase in those circumstances? How much difference would it make to those requirements if people had fewer chronic conditions? We conclude that the overall prevalence rates for almost all conditions associated mostly with old age would rise by more than 25 percent and that health care requirements would grow more rapidly than the population – more than twice as rapidly in the case of hospital stays – if the rates for each age group remained constant. We conclude also that even modest reductions in the average number of conditions at each age could result in substantial savings.
Is there evidence that households adjust their asset portfolios just prior to retirement in response to a means-tested public pension? We address this question by estimating a system of asset equations constrained to add up to net worth. We find little evidence that in 2006 healthy households or couples responded to the incentives embedded in the means test determining pension eligibility by reallocating their assets. While there are some significant differences in asset portfolios associated with being near the income threshold, being of pensionable age, and being in poor health these differences are often only marginally significant, are not robust across time, and are not clearly consistent with the incentives inherent in the pension eligibility rules. In 2006, any behavioral response to the means test seems to occur among single pensioners in poor health. Comparison with 2002 results suggests the incentives to reallocate assets may have weakened over time.
We analyse a large longitudinal data file to determine who has retired and to assess how successful they are in maintaining their incomes after retirement. Our main conclusions are as follows. First, in the two years immediately after retirement the aftertax income replacement ratios average about two-thirds when calculated across all ages of retirement. Second, the ratios tend to increase with the age of retirement. Third, the ratios increase with years in retirement, at least in the first few years. Finally, income replacement ratios are highest in the lowest income quartile and generally decline as income increases; within each quartile the replacement ratios are higher for those who retired later than for those retired earlier.
This paper sheds light on the current state and the likely future development of Korea’s evolving pension system by analyzing it from a comparative perspective. It shows that, because of its many institutional layers, the Korean pension system could evolve into one of several different types of pension regimes: if the National Pension Scheme (NPS) were to continue to be dominant and occupational pensions continued to be marginal, a classic Bismarckian system would emerge; if the NPS were to be significantly reduced and occupational pensions were to be significantly expanded, a Bismarckian-light system would be the outcome; if other changes were to occur—such as the conversion of the basic pension into a universal, poverty-preventing pension and the partial replacement of the NPS by a mandatory personal or occupational-pension scheme—a mixed regime would emerge. The paper argues that the emergence and consolidation of a Bismarckian-style, single-pillar system is more likely than the shift to one of the variants of the multi-pillar system, such as the Bismarckian-light and the mixed regime type. Since there are many sources of path dependence that reinforce the Bismarckian path of development, a shift to a different pension regime is very difficult. For example, large accumulated entitlements and the strong redistributive role of the NPS make it difficult to reduce the public, earnings-related pension program, and significant accumulated entitlements and the important role of the severance pay scheme in company financing also make it difficult to expand occupational pensions.