TORONTO, July 24, 2013 /CNW/ - The real demographic challenge for
Canadian policymakers is adapting to a population growing "younger,"
after taking increased life expectancies into account, says a report
released today by the C.D. Howe Institute. In "The Main Challenge of
Our Times: A Population Growing Younger," authors Marcel Boyer and
Sébastien Boyer propose an alternative approach to population aging,
which measures years to live instead of years since birth.
Since 1950, Canadian life expectancy, on average, has increased. For
example, a 65-year-old in 2010 had the same life expectancy as a 59.5
year-old in 1950. "Canadians are experiencing increases in longevity
and are willing to work longer than previous cohorts," said Marcel
Boyer. "Public policy should aim to provide Canadians with the
instruments to better manage retirement decisions."
While the issue of an aging society is normally viewed from the
perspective of the number of years since birth - a population's age
distribution - the authors turn this approach on its head. They focus
on years to live, tracking the increases in longevity for different age
cohorts since 1950. A 35-year-old had a remaining life expectancy of
38.6 years in 1950 but 46.8 years in 2010, showing a difference of 8.2
years. The real-1950 age of such a person in 2010 is therefore 35 minus
8.2, or 26.8 years. Similarly, members of 60-plus age groups may feel
they still have much to contribute to the labour force, and governments
should adapt policies to this reality.
The forthcoming generation of elderly will be more educated, which may
allow more flexibility and therefore lay the ground for double-career
paths, say the authors. A significant percentage of 50-plus workers,
say surveys, would like to embrace an "encore career." In a
double-career path, people would have the opportunity to complete one
career, start cashing their pension from it, if they so chose, as they
study and train for their second career. Then they would continue
working, stop pension withdrawals and restart pension contributions.
"New and more flexible labour market arrangements will be necessary,"
said Sébastien Boyer, "if continued labour force participation after
ages 60 to 65 is deemed desirable for the individual involved and
The report provides recommendations for policy changes, including
measures to allow the flexible use of pension and retirement funds and
the facilitate second-career paths. Examples:
Encourage phased-in retirement with changes to tax and pension rules.
These steps could permit workers to work and receive pension benefits
while contributing to a pension plan;
Reduce the clawbacks on earned income for Guaranteed Income Supplement
recipients, which provide strong disincentives to work;
Adjust employment insurance programs to better cater to the needs of
workers with a long history of service who are laid off late in their
careers, in particular for those wishing or willing to switch careers;
Ensure flexible severance pay rules that reduce the financial
disincentive to leave a job and find a new one.
For the report go to: http://www.cdhowe.org/the-main-challenge-of-our-times-a-population-growing-younger/22311
SOURCE: C.D. Howe Institute
For further information:
Marcel Boyer, Professor Emeritus of Economics, Université de Montréal, Research Fellow, C.D. Howe Institute, Fellow of CIRANO; Sébastien Boyer, Collège Jean-de-Brébeuf and CIRANO; Finn Poschmann, Vice President, Research, C.D. Howe Institute; 416-865-1904, email: firstname.lastname@example.org