IESOP: Independence and Economic Security of the Older Population

Abstract of Research Paper No. 1
Public Pensions in Canada
by John Burbidge

Intergenerational transfers occur within every society. Those who are able to provide for more than their own needs directly or indirectly provide resources to those who are unable to care for themselves. Each society must somehow choose from the set of all possible transfers a particular allocation that is most appealing given its procedures for making collective choices. Over the last two decades real transfers to elderly households have increased while real earnings for both men and women of working age have stagnated. A significant component of these transfers has been financed by increasing tax rates and by issuing debt. Neither of these options is sustainable indefinitely. Among other things, this paper argues on intergenerational equity grounds that the solution to the "CPP problem" lies not in raising payroll tax rates but rather in reducing benefits.

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Last updated: Dec 17, 1997.