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Social Security Programs and Retirement around the WorldMicro-Estimation$
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Jonathan Gruber and David A. Wise

Print publication date: 2004

Print ISBN-13: 9780226310183

Published to Chicago Scholarship Online: February 2013

DOI: 10.7208/chicago/9780226309989.001.0001

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Income Security Programs and Retirement in Canada

Income Security Programs and Retirement in Canada

(p.99) 2 Income Security Programs and Retirement in Canada
Social Security Programs and Retirement around the World

Michael Baker

Jonathan Gruber

Kevin Milligan

University of Chicago Press

This chapter aims to model the entire income security (IS) system in a unified framework. The key to the approach used is the building of a comprehensive data set (based on the Statistics Canada Longitudinal Worker File) that has information for a very large sample of older Canadians on their earnings histories, work decisions, marital status and spousal characteristics, and the characteristics of their jobs. These data are employed to construct a simulation model that incorporates the incentives for retirement under the various programs of the Canadian public IS system: the CPP/QPP; the Old Age Security (OAS) system comprising the basic OAS benefit; the Guaranteed Income Supplement; and the Spouse Allowance. There are two findings of importance. First, for the typical worker, the public IS system provides increasingly strong disincentives to work after age sixty. Second, there is a significant impact of these disincentives on work decisions. Using both one-year and more forward-looking measures, it is estimated that workers with larger returns to additional work are less likely to leave the labor force.

Keywords:   income security system, retirement, Old Age Security, Guaranteed Income Supplement, Spouse Allowance

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