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Later Retirement: the Win-Win Solution

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  • Peter Hicks

    (Peter Hicks Consulting)

Abstract

Over the coming two decades people are likely to stay in the workforce much longer – by about five years. There will be a strong trend towards later retirement as a result of social and economic pressures, without any policy action. The results will be largely positive and should therefore be supported by policy whenever possible. Delaying work-retirement transitions by five years would have large, positive economic and fiscal effects, reducing pressures on growth, government finances and pension funding. While there is no immediate crisis to be addressed, a key reform will be to gradually increase the standard age of pension eligibility in order to bring it more in line with increases in longevity. Such reforms should involve gradually raising the age band at which one could receive C/QPP. Similar changes to the Old Age Security (OAS) would provide consistency in signals about retirement ages.

Suggested Citation

  • Peter Hicks, 2012. "Later Retirement: the Win-Win Solution," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 345, March.
    • Handle: RePEc:cdh:commen:345
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    File URL: https://www.cdhowe.org/public-policy-research/later-retirement-win-win-solution
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    References listed on IDEAS

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    1. Kevin D. Moore & William Robson & Alexandre Laurin, 2010. "Canada’s Looming Retirement Challenge: Will Future Retirees Be Able to Maintain Their Living Standards upon Retirement?," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 317, December.
    2. Stefanie Behncke, 2009. "How Does Retirement Affect Health?," University of St. Gallen Department of Economics working paper series 2009 2009-13, Department of Economics, University of St. Gallen.
    3. Frank T. Denton & Christine H. Feaver & Byron G. Spencer, 2009. "Cohort Working Life Tables for Older Canadians," Social and Economic Dimensions of an Aging Population Research Papers 247, McMaster University.
    4. Frank T. Denton & Ross Finnie & Byron G. Spencer, 2009. "Patterns of Retirement as Reflected in Income Tax Records for Older Workers," Social and Economic Dimensions of an Aging Population Research Papers 257, McMaster University.
    5. Frank T. Denton & Byron G. Spencer, 2011. "Age of Pension Eligibility, Gains in Life Expectancy, and Social Policy," Canadian Public Policy, University of Toronto Press, vol. 37(2), pages 183-199, June.
    6. Tammy Schirle, 2008. "Why Have the Labor Force Participation Rates of Older Men Increased since the Mid-1990s?," Journal of Labor Economics, University of Chicago Press, vol. 26(4), pages 549-594, October.
    7. Peter Hicks, 2011. "The surprisingly large policy implications of changing retirement durations," Social and Economic Dimensions of an Aging Population Research Papers 284, McMaster University.
    8. Anonymous, 2009. "Abstract of the discussion," British Actuarial Journal, Cambridge University Press, vol. 15(1), pages 202-217, March.
    9. Martin Hering & Thomas R. Klassen, 2010. "Strengthening Fairness and Funding in the Canada Pension Plan: Is Raising the Retirement Age an Option?," Social and Economic Dimensions of an Aging Population Research Papers 263, McMaster University.
    10. Robin Banerjee & William B.P. Robson, 2009. "Faster, Younger, Richer? The Fond Hope and Sobering Reality of Immigration's Impact on Canada's Demographic and Economic Future," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 291, July.
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    Cited by:

    1. Van Borm, Hannah & Burn, Ian & Baert, Stijn, 2021. "What Does a Job Candidate's Age Signal to Employers?," Labour Economics, Elsevier, vol. 71(C).
    2. William B.P. Robson & Colin Busby & Aaron Jacobs, 2017. "The Fiscal Implications of Canadians’ Working Longer," e-briefs 268, C.D. Howe Institute.
    3. James MacGee, 2012. "The Rise in Consumer Credit and Bankruptcy: Cause for Concern?," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 346, April.
    4. Peter Hicks, 2017. "Towards a New Balance in Social Policy: The Future Role of Guaranteed Annual Income within the Safety Net," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 465, January.
    5. Marcel Boyer & Sebastien Boyer, 2013. "The Main Challenge of Our Times: A Population Growing Younger," e-briefs 161, C.D. Howe Institute.

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    More about this item

    Keywords

    Governance & Public Institutions; Canada; retirement; public and private pensions; aging;
    All these keywords.

    JEL classification:

    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J28 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Safety; Job Satisfaction; Related Public Policy
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination

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