Social and Economic Dimensions of an Aging Population


Vol. 5 No. 4

Winter 2003/2004

SEDAP (Social and Economic Dimensions of an Aging Population) is a multidisciplinary research program studying a wide range of aging-related issues and is funded by the Social Sciences and Humanities Research Council of Canada. SEDAP is centred at McMaster University and involves researchers from that institution as well as from the University of British Columbia, Université de Montréal, Queen's and the University of Toronto.


I. SEDAP Research Papers

SEDAP Research Papers are available on the SEDAP website at no cost. Paper copies may be obtained for a nominal charge. Please contact Mrs. Gail Kalika, Department of Economics, KTH-426, McMaster University, Hamilton, Ont., Canada, L8S 4M4.

Brief descriptions follow of the most recently released papers in the SEDAP series.

SEDAP Research Paper No. 109:

Social Transfers and Income Inequality in Old-age: A Multi- national Perspective

Robert L. Brown (Statistics and Actuarial Science, University of Waterloo) and Steven G. Prus (Sociology, Carleton University)

This paper reviews the social security systems of ten Western developed nations, including Canada and the United States, and analyzes income inequality across these countries to determine the equalizing effect of public pensions (transfers) on income distribution. The authors hypothesize that there is a positive relationship between old-age income equality and the proportion of seniors' total income from public pensions as public benefits will likely improve the relative income status of those who were poor during their working years.

Data used are from the Luxembourg Income Study, a compilation of income survey data from various countries that have been made comparable. Brown and Prus focus their analysis on elderly-headed (65+) households, and adjust for household size by the square root of the number of household members. Income is measured by quintiles to allow cross-national comparisons and Gini coefficients are calculated to measure overall old-age income inequality.

The authors find that while the higher the relative level of government transfers the lower the overall extent of old-age income inequality, it is not a perfect relationship. They point out that transfers represent a much higher portion of elderly household income in Germany than they do in Canada, while old-age income distribution in the two countries is virtually equal. As well, Canada on a per capita basis spends roughly the same on transfers as do the UK and Australia, yet Canada has a much higher level of overall old-age income equality. The authors suggest that Registered Retirement Savings Plans, Registered Pension Plans, and the tax system in Canada would have to be part of the explanation.

SEDAP Research Paper No. 110:

Organizational Change and the Health and Well-Being of Home Care Workers

Margaret Denton (Gerontological Studies and Sociology, McMaster University), Isik Urla Zeytinoglu (School of Business, McMaster University) and Sharon Davies (Gerontological Studies, McMaster University)

Effective October 1, 1997, home care in Ontario was restructured from a non-competitive system of care delivery by non-profit and for- profit organizations to a system of managed competition where both non-profit and for-profit agencies compete for contracts to deliver services. This research study examines the mental and physical health of home care workers after this restructuring occurred.

Data were collected for this study between 2000 and 2002 in Hamilton, Ontario. The authors began with 59 interviews with local agency directors, managers and union representatives to develop an understanding of health and safety issues in their agencies. These were followed by a series of 29 discussion group meetings with employees of the participating agencies. Information from the interviews and the discussion groups served to inform the development of a questionnaire, administered to all 1949 employees of the home care agencies and resulting in 1311 responses. 64% of the respondents had worked in the home care sector during or prior to 1997.

The authors present and discuss the responses to their survey questions in detail. Among their findings, 93.5 per cent of respondents describe their health as good, very good or excellent. The authors compare this to responses from the National Population Health Survey, where 95.4 per cent of employed women aged 20-64 rated their health as good, very good or excellent. The authors also report that 73.9 per cent of their survey respondents agreed or strongly agreed with the statement, "If I were completely free to choose, I would prefer to continue working at this agency." They found that more than a quarter of their survey respondents reported their job as stressful or very stressful and about a quarter of respondents also said that, overall, their lives were stressful or very stressful.

The study includes a number of policy recommendations, including establishing wage parity between home care workers and other health care workers and lengthening the time frame of home care delivery contracts to provide more stability and job security for workers. The study concludes with the authors' plans to extend their research and to compare the results of their survey with a similar survey they conducted in 1996.

SEDAP Research Paper No. 111:

Stasis Amidst Change: Canadian Pension Reform in an Age of Retrenchment

Daniel Béland (Sociology, University of Calgary) and John Myles (Sociology, University of Toronto)

During the 1950s and 1960s, Canada constructed a retirement income system around three tiers: 1) Old Age Security (OAS), a universal flat-rate pension supplemented by the Guaranteed Income Supplement (GIS) that provides a guaranteed income for seniors without additional sources of income, both financed from general revenue; 2) the Canada Pension Plan (CPP) and Quebec Pension Plan (QPP), earnings-related public pensions financed from payroll contributions ; and 3) private, although tax-subsidized, employer- sponsored Registered Retirement Plans (RPPs) and individual retirement savings accounts (Registered Retirement Savings Plans or RRSPs).

The authors examine attempts to retrench pension benefits over the last twenty years and conclude that the Canadian system has emerged relatively intact. The "clawback" of OAS benefits introduced in 1989 might have resulted in substantial erosion of benefits for middle-income seniors since the income threshold for clawback was partially deindexed. However, full indexing was restored in 2000. The proposed replacement of OAS and GIS with the "Seniors Benefit" was never enacted and the main result of the 1997 CPP reform was to raise contribution rates to stabilize the system.

The authors then assess why the Canadian system has experienced relatively little retrenchment, compared for example to many European systems. They note that Canadian public sector pension expenditures are comparatively modest by international standards (about 5.5 per cent of GDP in the 1990s) and that Canadian retirees receive a larger fraction of their incomes from private occupational pensions, personal retirement accounts and other forms of savings. The potential contribution of pension cuts to policy objectives such as deficit reduction is therefore relatively modest and thus other social spending targets have been found. The authors also posit that higher payroll taxes, as may be found in many European countries, create strong incentives for reform and that such incentives would thus be relatively weak in the Canadian context. Finally, the authors argue that while poverty among Canadian seniors has declined greatly over recent decades, income distribution figures make it difficult to sustain the case that retirees are becoming "too rich", leaving little political room for pension reform.

SEDAP Research Paper No. 112:

Socioeconomic Influence on the Health of Older People: Estimates Based on Two Longitudinal Surveys

Neil J. Buckley, Frank T. Denton, A Leslie Robb and Byron G. Spencer (Economics, McMaster University)

Much research has demonstrated that there is a strong positive relationship between socioeconomic status (SES) and health status. Understanding that relationship and identifying the causality behind it remain difficult tasks. Are people in poor health because they have low SES, or do they have low SES because of their poor health? This paper compares estimates of the socioeconomic determinants of health among older Canadians based on two longitudinal surveys, the Survey of Labour and Income Dynamics (SLID) and the National Population Health Survey (NPHS).

The health measure in both surveys is self-reported health. The analysis in this paper is restricted to those aged 50 or older in 1996 who were in 'good', 'very good' or 'excellent' health (categories which the authors aggregate and define as good health). The authors go on to examine the probability of remaining in good health one, two and four years later and ask whether that probability is affected by socioeconomic factors as well as age. For each respondent, household income in 1996 is put into an income equation developed by the authors and standardized to age 50-54 to provide an estimate of lifetime income. This income measure together with educational attainment provides a measure of SES; thus the measure of socioeconomic status does not change over the period of study, while the health status variable may.

The authors report that the evidence from both surveys suggests that SES does play a role in the probability of remaining in good health. While the estimated probabilities of remaining in good health decline with age for both men and women, their findings indicate that the probabilities are notably higher for those with high SES than for those with low SES (other things equal). They note, however, that differences in SES account for only a small fraction of overall differences in the probability of remaining healthy: most of the differences are left to be explained by other factors.

editor: Deb Fretz -
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Last revised: Dec 22, 2003.