The retirement incentive effects of Canada's Income Security Programs

Canada has a large Income Security system for retirement that provides significant and widely varying disincentives to work at older ages. We provide an empirical analysis of the retirement incentives of the Canadian Income Security system,p a using a new administrative database. We find that the work disincentives inherent in the Canadian, Income Security system have significant impacts on retirement. This suggests that program reform can play a role in responses to fiscal pressures. We also demonstrate the importance of controlling for-lifetime earnings in retirement models. Specifications without these controls overestimate the-effects of the Income Security system.