The Declining Retirement Prospects of Immigrant Men

We compare the retirement prospects of immigrant men with their native-born counterparts. Using data from the Survey of Labour and Income Dynamics, we estimate a significant gap of 43 percent in private pension income and 30 percent in private pension contributions between immigrants and the native born. The gap in public pension incomes is negligible and reduces the overall pension gap, but only partially. Furthermore, the pension income and contribution gap is significantly larger for more recently arrived immigrant cohorts, consistent with evidence of weaker earnings for this group. We provide age profiles of pension income and contributions and discuss problems in interpreting the results without adjusting for age. Controlling for age and earnings differences, immigrants are still about 11 percent less likely to make contributions to a private pension program, but there is no difference in the contribution rates out of earnings of those who contribute. Recently arrived immigrants are significantly less likely to make contributions to a private pension program and appear to be neglecting private pension contribution opportunities more than earlier immigrants and the native born, which may have adverse implications for Canada's public retirement programs.