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The Effects of Education on Canadians’ Retirement Savings Behaviour

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  • Messacar, Derek

Abstract

This paper assesses the extent to which education affects how Canadians save and accumulate wealth for retirement. The paper makes three contributions. First, a descriptive analysis is presented of differences in savings and home values across individuals based on their levels of educational attainment. To this end, new datasets that link survey respondents from the 1991 and 2006 censuses of Canada to their administrative tax records are used. These data provide a unique opportunity to jointly observe education, savings, home values, and a plethora of other factors of relevance. Second, the causal effect of high school completion on savings rates in tax-preferred accounts is estimated, exploiting compulsory schooling reforms in the identification. Third, building on a recent study by Messacar (2015), education is also found to affect how individuals re-optimize their savings rates in response to an automatic change in pension wealth accumulation. The implications of this study’s findings for the “nudge paradigm” in behavioural economics are discussed.

Suggested Citation

  • Messacar, Derek, 2017. "The Effects of Education on Canadians’ Retirement Savings Behaviour," Analytical Studies Branch Research Paper Series 2017391e, Statistics Canada, Analytical Studies Branch.
    • Handle: RePEc:stc:stcp3e:2017391e
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    File URL: https://www150.statcan.gc.ca/n1/en/catalogue/11F0019M2017391
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    Cited by:

    1. Ravit Rubinstein-Levi & Haim Kedar-Levy, 2019. "The Effect of Attitudes Regarding Retirement on Pension Savings," Review of Economics & Finance, Better Advances Press, Canada, vol. 15, pages 1-13, February.

    More about this item

    Keywords

    Savings; Retirement; Registered Retirement Savings Plans; Pensions; Educational level; Educational attainment;
    All these keywords.

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