Income Inequality Among Seniors in Canada: the Role of Womens Labour - - PowerPoint PPT Presentation

Introduction Data Methods Results Robustness Conclusions

Income Inequality Among Seniors in Canada: the Role of Women’s Labour Market Experience

Tammy Schirle (WLU) Third Annual CLSRN Conference May 29, 2009

Tammy Schirle (WLU) Third Annual CLSRN Conference Income Inequality Among Seniors in Canada: the Role of Women’s Labour Market Experience

Introduction Data Methods Results Robustness Conclusions Motivation

Motivation Issue: incomes of seniors

Elderly poverty Adequacy of income support programs

Income inequality among seniors

⇒ inequality in access to health services ⇒ inequality in life expectancy Preference for redistribution

What drives changes in the senior income distribution?

Targeted policy response

Tammy Schirle (WLU) Third Annual CLSRN Conference Income Inequality Among Seniors in Canada: the Role of Women’s Labour Market Experience

Introduction Data Methods Results Robustness Conclusions Interesting Trends

Figure 1 - Poverty and inequality, elderly married couples

0.20 0.25 0.30 0.35

Gini coefficient

0.00 0.05 0.10 0.15

Incidence of low income

1976 1981 1986 1991 1996 2001 2006

Tammy Schirle (WLU) Third Annual CLSRN Conference Income Inequality Among Seniors in Canada: the Role of Women’s Labour Market Experience

Introduction Data Methods Results Robustness Conclusions Interesting Trends

Figure 3 - General increase in income and income inequality

0.6 0.8 1.0

ensity

1996 2001 2006

0.0 0.2 0.4

9 10 11 12

De

9 10 11 12 Log After Tax Income of Senior Married Couples

Tammy Schirle (WLU) Third Annual CLSRN Conference Income Inequality Among Seniors in Canada: the Role of Women’s Labour Market Experience

Introduction Data Methods Results Robustness Conclusions Interesting Trends

Figure 2 - Labour force participation of women

75

%)

65

women (%

55

ation of w

45

participa United States Canada

• ur force

35

Labo

25 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005

Tammy Schirle (WLU) Third Annual CLSRN Conference Income Inequality Among Seniors in Canada: the Role of Women’s Labour Market Experience

Introduction Data Methods Results Robustness Conclusions Objectives

Objectives:

Document changes in distribution of senior family income 1996-2006 Role of women’s experience, employment, public and private pension Role of other characteristics, men’s employment, pensions

Preview:

Distribution shifts: women’s pension, employment Disequalizing effects: education, men’s employment Equalizing effects: women’s CPP/QPP, men’s pension, women’s FTFY exp.

Tammy Schirle (WLU) Third Annual CLSRN Conference Income Inequality Among Seniors in Canada: the Role of Women’s Labour Market Experience

Introduction Data Methods Results Robustness Conclusions SLID

Survey of Labour and Income Dynamics (RDC)

1996, 2006 Married couples, oldest spouse age 65-79 Senior income = couple’s after tax income + RRSP withdrawals 2006 dollars

Tammy Schirle (WLU) Third Annual CLSRN Conference Income Inequality Among Seniors in Canada: the Role of Women’s Labour Market Experience

Introduction Data Methods Results Robustness Conclusions SLID

Key variables Income Sources

Employment = + earnings Pension access = + RPP, RRIF, RRSP CPP/QPP access = + CPP/QPP

Characteristics

Education, Age FTFY equivalent experience

Also consider: Poor health, immigrant status, number of children, urban, province Women’s age at first birth, age first marriage, married more than once, single generation in economic family

Tammy Schirle (WLU) Third Annual CLSRN Conference Income Inequality Among Seniors in Canada: the Role of Women’s Labour Market Experience

Introduction Data Methods Results Robustness Conclusions Distribution of Senior Couples’ After Tax Income

Table 1: Changes in the senior income distribution 1996 2006 % Change Percentile 10 23678 26405 11.5 50 35141 43301 23.2 90 65866 79477 20.7 Gini 0.250 0.255 2.1 Sample size 1719 1409

Tammy Schirle (WLU) Third Annual CLSRN Conference Income Inequality Among Seniors in Canada: the Role of Women’s Labour Market Experience

Introduction Data Methods Results Robustness Conclusions Distribution of Senior Couples’ After Tax Income

Table 2: Changes in income sources 1996 2006 Notable Wives Earnings .17 .28 top ↑ 19 pts. Pensions .28 .47 middle ↑ 23 pts. CPP/QPP .56 .73 low, middle ↑ 22+ Husbands Earnings .21 .35 top ↑ 21 pts. Pensions .66 .74 low ↑ 18 pts. CPP/QPP .94 .95

Tammy Schirle (WLU) Third Annual CLSRN Conference Income Inequality Among Seniors in Canada: the Role of Women’s Labour Market Experience

Introduction Data Methods Results Robustness Conclusions Distribution of Senior Couples’ After Tax Income

Tables 3-6: Changes in characteristics 1996 2006 Notable Wives <= Gr.8 .34 .21 middle ↓ 16 pts. University .04 .10 top ↑ 15 pts. FTFY 16 19 low ↑ 4 Husbands <= Gr.8 .39 .21 low ↓ 23 pts. University .09 .17 top ↑ 13 pts. FTFY 42 39

Tammy Schirle (WLU) Third Annual CLSRN Conference Income Inequality Among Seniors in Canada: the Role of Women’s Labour Market Experience

Introduction Data Methods Results Robustness Conclusions Distribution of Senior Couples’ After Tax Income

Tables 3-6: Changes in characteristics 1996 2006 Notable Wives Poor health .07 .05 low ↑ 3 pts. Immigrant .29 .24 ↓ tails Age first married 23 23 top ↓ Married more than once .10 .14 low, middle ↑ Family Number of children 3.61 3.12 Urban .81 .75 Single generation .78 .84 low ↑ 12 pts.

Tammy Schirle (WLU) Third Annual CLSRN Conference Income Inequality Among Seniors in Canada: the Role of Women’s Labour Market Experience

Introduction Data Methods Results Robustness Conclusions Description

Decomposition of Changes in the Income Distribution Firpo, Fortin, Lemieux (2007) combines methods from

Dinardo, Fortin, Lemieux (1996) - counterfactual distribution & statistics Firpo, Fortin, Lemieux (2009) - unconditional quantile / recentered influence function regressions Oaxaca-Blinder decompositions

Tammy Schirle (WLU) Third Annual CLSRN Conference Income Inequality Among Seniors in Canada: the Role of Women’s Labour Market Experience

Introduction Data Methods Results Robustness Conclusions Description

Stage 1: Overall Composition and Structure Effects 1996 (ν0), 2006 (ν1) DFL (1996) reweighting (νC) → Counterfactual - 2006 composition with 1996 structure ˆ ∆ν

O = ( ˆ

ν1 − ˆ νC)

• structure

+ ( ˆ νC − ˆ ν0)

• composition

Tammy Schirle (WLU) Third Annual CLSRN Conference Income Inequality Among Seniors in Canada: the Role of Women’s Labour Market Experience

Introduction Data Methods Results Robustness Conclusions Description

Stage 2: Contribution of each factor Firpo, Fortin, Lemieux (2009) Unconditional quantile / RIF regressions → γν

0, γν 1, γν C

Contributions to composition effects ˆ ∆ν

X =

N

i=1 ˆ

ω∗

1(Ti) · Xi

• · ˆ

γν

C −

N

i=1 ˆ

ω∗

0(Ti) · Xi

• · ˆ

γν

Tammy Schirle (WLU) Third Annual CLSRN Conference Income Inequality Among Seniors in Canada: the Role of Women’s Labour Market Experience

Introduction Data Methods Results Robustness Conclusions Stage 1

Figure 4 - Composition effects (1996 vs. Counterfactual)

0.6 0.8 1.0

ensity

1996 2006 Counterfactual

0.0 0.2 0.4

9 10 11 12

De

9 10 11 12 Log After Tax Income of Senior Married Couples

Tammy Schirle (WLU) Third Annual CLSRN Conference Income Inequality Among Seniors in Canada: the Role of Women’s Labour Market Experience

Introduction Data Methods Results Robustness Conclusions Stage 1

Figure 5 - Composition effects (1996 vs. Counterfactual)

0.15 0.20

After Tax Income

Total ff

0.00 0.05 0.10

10 20 30 40 50 60 70 80 90 Change in Log A

Percentile

Composition Effects Structure Effects

Tammy Schirle (WLU) Third Annual CLSRN Conference Income Inequality Among Seniors in Canada: the Role of Women’s Labour Market Experience

Introduction Data Methods Results Robustness Conclusions Stage 2 - Unconditional quantile (RIF) regressions

Table 8 - Log After Tax Income, 1996 Percentile 10th 50th 90th Wives - Employment 0.118 0.287 0.260 (.035) (.047) (.105) Wives - Pension 0.043 0.206 0.101 (.019) (.039) (.088) Wives - CPP/QPP 0.085 0.122

• 0.022

(.030) (.037) (.075) Husbands - Employment 0.071 0.137 0.305 (.029) (.040) (.089) Husbands - Pension 0.220 0.344 0.165 (.031) (.033) (.053) Husbands - CPP/QPP 0.491

• 0.074
• 0.255

(.099) (.055) (.150)

Tammy Schirle (WLU) Third Annual CLSRN Conference Income Inequality Among Seniors in Canada: the Role of Women’s Labour Market Experience

Introduction Data Methods Results Robustness Conclusions Stage 2 - Decomposition of Composition Effects

Figure 6 - Decomposition of composition effects

0.06

Wives' Characteristics

0.05

Employment Pension Wives' Characteristics

0.04 ncome

CPP/QPP Education Age FTFY Experience

0.03 fter tax in 0.02 ge in log a 0.01 Chang 0.00 ‐0.01 1 2 3 4 5 6 7 8 9 Quantile

Tammy Schirle (WLU) Third Annual CLSRN Conference Income Inequality Among Seniors in Canada: the Role of Women’s Labour Market Experience

Introduction Data Methods Results Robustness Conclusions Stage 2 - Decomposition of Composition Effects

Figure 6 - Decomposition of composition effects

0.03 0.04 0.05 0.06 fter tax income

Employment Pension CPP/QPP Education Age FTFY Experience Husbands' Characteristics

‐0.01 0.01 0.02 1 2 3 4 5 6 7 8 9 Change in log af Quantile

Tammy Schirle (WLU) Third Annual CLSRN Conference Income Inequality Among Seniors in Canada: the Role of Women’s Labour Market Experience

Introduction Data Methods Results Robustness Conclusions Stage 2 - Decomposition of Composition Effects

Figure 7 - Decomposition of composition effects

‐0.08 ‐0.06 ‐0.04 ‐0.02 0.02 0.04 0.06 0.08 0.1 0.12 0.14

Increase Inequality Decrease Inequality

90 10 W ‐ Employ. W ‐ Pension 90‐10 W ‐ Pension W ‐ CPP

W‐Educ H‐Educ H‐Employ H‐FTFY W Pen W‐Emp. W‐CPP W‐FTFY H‐Pen

50‐10 W ‐Educ. W ‐ Age

W‐Pen

W ‐ FTFY H Employ 90‐50 H ‐ Employ. H ‐ Pension H ‐ CPP H ‐Educ. Gini H ‐ Age H FTFY H ‐ FTFY Tammy Schirle (WLU) Third Annual CLSRN Conference Income Inequality Among Seniors in Canada: the Role of Women’s Labour Market Experience

Introduction Data Methods Results Robustness Conclusions Inclusion of other variables

Figure 15.C. - Other characteristics

0.005 0.010

W ‐Poor Health W ‐ Immigrant H ‐ Poor Health H ‐ Immigrant # Children Urban Province

‐0.010 ‐0.005 0.000

1 2 3 4 5 6 7 8 9 Quantile

Tammy Schirle (WLU) Third Annual CLSRN Conference Income Inequality Among Seniors in Canada: the Role of Women’s Labour Market Experience

Introduction Data Methods Results Robustness Conclusions Inclusion of other variables

Figure 16.D. - Other characteristics

0.005 0.010

W ‐ Age first birth W ‐ Age first marriage W ‐ Married 2+ H ‐ Married 2+ Single Generation

‐0.010 ‐0.005 0.000

1 2 3 4 5 6 7 8 9

Quantile

Tammy Schirle (WLU) Third Annual CLSRN Conference Income Inequality Among Seniors in Canada: the Role of Women’s Labour Market Experience

Introduction Data Methods Results Robustness Conclusions Inclusion of other variables

Results robust to: Inclusion of other variables Exclusion of RRSP income Wages vs. earnings (self-employment) Inclusion of observations without FTFY response Only income sources vs. only education, age, FTFY

Tammy Schirle (WLU) Third Annual CLSRN Conference Income Inequality Among Seniors in Canada: the Role of Women’s Labour Market Experience

Introduction Data Methods Results Robustness Conclusions Concluding remarks

Key Results Changes for women are worth considering

Employment & pensions - increase senior incomes CPP/QPP - important equalizing effects ↑ FTFY experience - modest effect

Driving inequality - education, men’s employment Equalizing effects - men’s pensions Policy Implications C/QPP plays important role - expansion? Young women’s LF attachment → pensions, C/QPP for seniors

EI maternity leave, child care

Tammy Schirle (WLU) Third Annual CLSRN Conference Income Inequality Among Seniors in Canada: the Role of Women’s Labour Market Experience