Income Replacement Rates Among Canadian Seniors: The Effect of Widowhood and Divorce

Analytical Studies Branch Research Paper Series No. 343

35 Pages Posted: 28 Jun 2012

See all articles by Sebastien Larochelle-Côté

Sebastien Larochelle-Côté

Government of Canada - Business & Labour Market Analysis Division

John Myles

Statistics Canada

Garnett Picot

Statistics Canada

Date Written: June 20, 2012

Abstract

Using a longitudinal database and fixed-effects econometric models, this paper assesses the effect of widowhood or widowerhood, and divorce after age 55 on income replacement rates during the retirement years. Among women, separation or divorce has a larger negative effect than does widowhood. The effect of divorce or separation is greatest among women from higher-income families, where there is more reliance on private-pension and investment income. Reliance on public-pension income reduces the effect of divorce on replacement rates for lower-income women. Among men, separation or divorce has little effect on replacement rates. Widowerhood increases replacement rates among middle- and higher-income men.

More related studies on aging, pensions and retirement and Income and wealth from the Social Analysis Division can be found at Update on Social Analysis Research.

Keywords: replacement rate, income security, widowhood, divorce

JEL Classification: J1, J2

Suggested Citation

Larochelle-Côté, Sebastien and Myles, John and Picot, Garnett, Income Replacement Rates Among Canadian Seniors: The Effect of Widowhood and Divorce (June 20, 2012). Analytical Studies Branch Research Paper Series No. 343, Available at SSRN: https://ssrn.com/abstract=2094457 or http://dx.doi.org/10.2139/ssrn.2094457

Sebastien Larochelle-Côté (Contact Author)

Government of Canada - Business & Labour Market Analysis Division ( email )

24th Floor - R.H. Coats Building
Tunney's Pasture
Ottawa, Ontario K1A 0T6
Canada

John Myles

Statistics Canada ( email )

Ottawa, Ontario
Canada

Garnett Picot

Statistics Canada ( email )

Ottawa, Ontario
Canada
613-951-8214 (Phone)
613-951-5403 (Fax)

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