The OAS Eligibility Age and Employment
It is argued that eligibility for OAS/GIS discourages older Canadians from remaining in the workforce, and that we need to keep them working to avoid labour shortages and a sharp rise in the so-called dependency ratio.
But the fact of the matter is that 65 is not the trigger for retirement that it used to be, and that an increasing proportion of older Canadians stay in the workforce well past that age.
Statistics Canada recently reported that, while life expectancy has indeed been rising, the average number of years spent not workingÂ has actually been stable since the mid 1990s due to the fact that more and more seniors are still working.
Data from the Labour Force Survey show that fully one in four (24%) persons, aged 65 to 70, is still working, up from 11% in 2000. The rate has been trending sharply upward for a number of reasons. Some are working longer because they want to, and find work interesting. This is most often the case for higher income workers. Others are working longer due to inadequate retirement savings.
The trend to working well past age 65 will likely continue, and eligibility of OAS would hardly seem to have been much of a deterrent.
But many older workers are unable to continue working â€” especially those with an illness or disability, itself often caused by a lifetime of hard work. Lower income older workers are likely to be in much worse health than those with higher incomes.
Recent Statistics Canada data â€” for 2009 â€” show that 24% of all persons who were fully retired, and 16% of those who had partially retired, did so due to health or disability. â€œMany older workers will have difficulty remaining on the job due to poor health, even if they are not financially ready to retire.â€And 7% of those fully retired, and 6% of those partially retired, reported that they had retired to provide care.
An earlier Statistics Canada study, for 2002, found that one in four (26%) recent retirees would have continued to work if their health had been better.
A significant proportion of persons, aged over 65 and potentially impacted by an increase in the eligibility age for OAS/GIS, will be unable to replace that lost income by working.
It’s important to remember, too, that life expectancy varies by income. The disparity between the highest and lowest income quintiles is nearly five years for males (2005-2007).
(click on Sandwichman for the chart)
Seems to me that every 65 year old who is obliged to stay at his/her job for an additional two years, due to a change in the OAS eligibility age, means one less job for an under-65er. Has anyone done some analysis of the likely impact on the unemployment rate of such a change?
The ratio is not one to one but it is entirely plausible that there will be some crowding out of younger workers by older ones. The mainstream “research” done on this question has been extremely ideological and deceptive in order to create the impression that there is “no relationship” between retirement and employment and even that the relationship is positive — that is to say delaying retirement is claimed to create more jobs for the young. Does that sound counter intuitive? That’s because it’s totally made up.