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
Date Written: June 20, 2012
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: Suggested Citation