Public Policy and the Economic Wellbeing of Elderly Immigrants - - PowerPoint PPT Presentation

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Public Policy and the Economic Wellbeing of Elderly Immigrants - - PowerPoint PPT Presentation

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Public Policy and the Economic Wellbeing of Elderly Immigrants Michael Baker, University of Toronto Dwayne Benjamin, University of Toronto Elliott Fan, Australian National University CLSRN Workshop, November 19 2008 Overview Policy

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SLIDE 1

Public Policy and the Economic Wellbeing of Elderly Immigrants

Michael Baker, University of Toronto Dwayne Benjamin, University of Toronto Elliott Fan, Australian National University CLSRN Workshop, November 19 2008

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Elderly Immigrants 1/21

Overview

  • Policy motivation

– Several government policies target older immigrants to Canada. – To the extent that immigration has an economic justification, there is a preference for immigrants who can contribute by working in Canada. – While there are humanitarian justifications for admitting older immigrants, several key policies limit their ability to tap Canadian income-maintenance system.

  • Are such restrictions credible?
  • What do we do?

– Provide an overview of the policies relevant for older immigrants – Using data from 1981 through 2006, document the composition and levels of income for older immigrants:

  • Focus on transfer income, and “bottom line” living standards.
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SLIDE 3

Elderly Immigrants 2/21

Policy Background I: Immigration

  • Immigration policy is largely designed to discourage the

immigration of older individuals.

  • For economic immigrants assessed by the point system, no

age-related points after age 53.

– Indeed, few native-born Canadians (of any age) would be admitted if screened through this system.

  • Most older immigrants are admitted through the Family Class,

usually sponsored by relatives (working-aged children).

– Sponsors must commit to “Undertaking” that restricts ability of sponsored relatives to collect social assistance; – Sponsors must also meet income criteria, so that older immigrants are highly selected.

  • Figures 1 through 5 show time trends of the immigration of

elderly.

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SLIDE 4

Elderly Immigrants 3/21

Figure 1: Immigration by Class

.25 .5 .75 1 Share of total immigration by class 1980 1985 1990 1995 2000 2005 Year Economic Family Refugee

Immigration by class: All ages

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SLIDE 5

Elderly Immigrants 4/21

Figure 2: Share of Immigration by Age

.05 .1 .15 .2 Share of total immigration by age group 1980 1985 1990 1995 2000 2005 Year 45-64 year olds 65+ year olds

Immigration by age

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SLIDE 6

Elderly Immigrants 5/21

Figure 3: Class of Immigration: 45 to 64

.25 .5 .75 1 Share of total immigration by class 1980 1985 1990 1995 2000 2005 Year Economic Class Family Class Refugee Class

Immigration by class: 45 to 64 years old

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SLIDE 7

Elderly Immigrants 6/21

Figure 4: Class of Immigration: 65 and older

.25 .5 .75 1 Share of total immigration by class 1980 1985 1990 1995 2000 2005 Year Economic Class Family Class Refugee Class

Immigration by class: 65 and older

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SLIDE 8

Elderly Immigrants 7/21

Figure 5: Older Immigrants in the Family Class

.05 .1 .15 .2 .25 Share of family immigration by age group 1980 1985 1990 1995 2000 2005 Year 45-64 year olds 65+ year olds

Age composition of family class

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SLIDE 9

Elderly Immigrants 8/21

Policy Background II: Income Maintenance

  • Old Age Security (OAS) is normally available to all Canadians

aged 65 and older.

– Minimum residency for positive benefits is 10 years – Level of benefit depends on years of residency (prorated on a base

  • f 40-years residence).

– Some eligibility can be transferred from abroad, depending on international social security agreements.

  • Guaranteed Income Supplement (GIS) is an income-tested

“top-up” to the OAS.

– With “super-GIS” (introduced in 1984), those with partial OAS can have their benefits topped to the maximum OAS/GIS.

  • Social Assistance (SA) is provincially administered.

– In principle, new immigrants are not eligible (undertaking). – After 10 years, can offset shortfalls from OAS/GIS (and even CPP)

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SLIDE 10

Elderly Immigrants 9/21

Empirical Analysis

  • Key questions:

– How do elderly immigrants fare in Canada. In particular, are their economic outcomes poor? – To what extent do older immigrants rely on various income support mechanisms?

  • Several dimensions to compare outcomes:

– Immigrants versus the native-born; – Recent immigrants versus those who lived more of their lives in Canada; – Outcomes over time; – Different types of income; – Individual versus family (per capita) income (and wellbeing).

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SLIDE 11

Elderly Immigrants 10/21

Data

  • Survey of Consumer Finances (SCF)

– 1981 through 1997

  • Survey of Labour and Income Dynamics (SLID)

– 1997 through 2006

  • Include all men, aged 20 plus, focusing on:

– Men aged 60 to 64, A6064 – Men 65 and older, A65P

  • Immigrant groups:

– Native-born – Years Since Migration (YSM) 0 to 9 – YSM 10 to 19 – YSM 20 and greater.

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SLIDE 12

Elderly Immigrants 11/21

Data (Continued)

  • Individual Income measures:

– Private income (Earnings, investment income, private pensions) – CPP/QPP – Government Transfers (Social Assistance, EI, OAS/GIS) – Total income – Proportion earning a non-zero amount of the income.

  • Corresponding measures of Family Per Capita income

– Ignores family composition

  • Being “Poor”: Income below Statistics Canada “Low Income

Measure”

– Accounts for differences in family age-composition and size.

  • All nominal values converted to $2006 using CPI
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Elderly Immigrants 12/21

Regression Specification

  • While means are useful, given sample sizes we pool across

time periods.

  • Estimates “regression adjusted” for a variety of factors:
  • Key controls:

– Age – YSM (and interactions) – Unrestricted Year Dummies – Location Dummies

  • Can construct regression adjusted mean differences across

groups.

– Also yields standard errors

yit = + j AGEG ji

j=1 4

  • +

k YSMki

k=1 3

  • +

kj YSMki AGEG ji

k=1 3

  • j=1

4

  • +
  • YDit +

l LOCli

l=1 L

  • + it
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SLIDE 14

Elderly Immigrants 13/21

Selected Results (Age 65 plus)

  • To confine discussion (in the talk), we only present results for

men 65 and older.

  • The following tables show:

– Raw (unadjusted) means for individual incomes from SCF (1986 through 1997) and SLID (1997 through 2006) – Corresponding raw means for selected family-based measures. – Adjusted differences in outcomes for men aged 65 and older, comparing immigrants to natives (for YSM 0-9, YSM 10-19, and YSM 20+).

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Elderly Immigrants 14/21

Mean Individual Incomes (Aged 65+, SCF)

Imm 1 Imm 2 Imm 3 Native Born (YSM < 10) (YSM 10-19) (YSM 20+) Total Earnings $2,419.28 $1,773.76 $1,433.14 $2,860.72 Investment Income $3,513.93 $2,196.35 $2,447.60 $3,858.41 Private Pension $6,416.75 $2,483.90 $3,623.79 $5,853.93 Private Income $12,645.52 $9,289.02 $8,238.36 $13,009.57 CPP/QPP $4,546.86 $1,004.24 $2,655.51 $4,744.38 Social Assistance $152.10 $1,205.37 $393.56 $214.72 OAS/GIS $5,412.14 $656.45 $5,692.13 $5,255.20 Transfer Income $6,225.97 $2,810.11 $6,603.55 $6,056.77 Total Income $23,418.35 $13,103.38 $17,497.41 $23,810.71

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Elderly Immigrants 15/21

Mean Individual Incomes (Aged 65+, SLID)

Imm 1 Imm 2 Imm 3 Native Born (YSM < 10) (YSM 10-19) (YSM 20+) Total Earnings $1,930.04 $914.69 $1,734.18 $2,610.74 Investment Income $2,647.30 $1,035.78 $1,696.85 $2,454.35 Private Pension $9,972.15 $3,604.25 $2,745.85 $9,071.27 Private Income $14,936.59 $6,117.64 $7,058.09 $14,478.98 CPP/QPP $5,219.64 $1,180.31 $1,035.08 $5,498.62 Social Assistance $37.38 $716.61 $216.65 $21.15 OAS/GIS $4,861.89 $1,508.76 $5,743.52 $4,703.63 Transfer Income $5,460.05 $2,688.08 $6,739.77 $5,504.14 Total Income $25,616.29 $9,986.04 $14,832.94 $25,481.74

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SLIDE 17

Elderly Immigrants 16/21

Mean Family Incomes (Aged 65+, SCF)

Imm 1 Imm 2 Imm 3 Native Born (YSM < 10) (YSM 10-19) (YSM 20+) Individual Income Private Sources $12,645.52 $9,289.02 $8,238.36 $13,009.57 Transfer Income $6,225.97 $2,810.11 $6,603.55 $6,056.77 Total Income $23,418.35 $13,103.38 $17,497.41 $23,810.71 Family Income (PC) Private Sources $10,024.25 $10,103.84 $9,983.86 $11,197.12 Transfer Income $5,198.74 $1,763.72 $4,418.03 $4,851.51 Total Income $18,303.98 $12,359.74 $15,917.21 $19,187.28 Family Size 2.059 3.760 2.992 2.184 Below LIM 0.037 0.262 0.069 0.025

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Elderly Immigrants 17/21

Mean Family Incomes (Aged 65+, SLID)

Imm 1 Imm 2 Imm 3 Native Born (YSM < 10) (YSM 10-19) (YSM 20+) Individual Income Private Sources $14,936.59 $6,117.64 $7,058.09 $14,478.98 Transfer Income $5,460.05 $2,688.08 $6,739.77 $5,504.14 Total Income $25,616.29 $9,986.04 $14,832.94 $25,481.74 Family Income (PC) Private Sources $12,098.52 $10,505.44 $10,299.11 $12,800.33 Transfer Income $4,710.31 $2,232.62 $4,332.10 $4,398.64 Total Income $20,646.40 $13,163.59 $15,153.28 $21,040.28 Family Size 2.038 4.543 3.692 2.301 Below LIM 0.033 0.221 0.129 0.028

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SLIDE 19

Elderly Immigrants 18/21

Regression Results (Aged 65+, SCF) Comparison to Native-born

Imm 1 Imm 2 Imm 3 (YSM < 10) (YSM 10-19) (YSM 20+) Individual Income Total Earnings

  • $4,461.00
  • $3,695.60
  • $2,850.25

Investment Income

  • $1,962.20
  • $1,588.00
  • $42.23

Private Pension

  • $4,203.00
  • $2,952.00
  • $964.40

Private Income

  • $8,403.00
  • $7,847.00
  • $3,766.10

CPP/QPP

  • $3,365.00
  • $1,637.50

$67.06 Social Assistance $905.00 $249.74 $110.00 OAS/GIS

  • $4,702.62

$243.30

  • $82.28

Transfer Income

  • $3,179.10

$694.10 $243.47 Total Income

  • $14,946.76
  • $8,790.00
  • $3,455.60

Family Income (PC) Private Sources

  • $3,954.00
  • $3,436.00
  • $1,918.70

Transfer Income

  • $3,262.04
  • $548.88
  • $1.10

Total Income

  • $9,641.00
  • $5,345.50
  • $1,929.90

Below LIM 0.236 0.049 0.006

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SLIDE 20

Elderly Immigrants 19/21

Regression Results (Aged 65+, SLID) Comparison to Native-born

Imm 1 Imm 2 Imm 3 (YSM < 10) (YSM 10-19) (YSM 20+) Individual Income Total Earnings

  • $5,404.00
  • $5,365.00
  • $2,973.20

Investment Income

  • $1,897.40
  • $1,258.92
  • $329.00

Private Pension

  • $6,191.00
  • $7,276.00
  • $1,233.40

Private Income

  • $13,433.00
  • $13,576.00
  • $4,626.00

CPP/QPP

  • $3,976.80
  • $4,135.40

$273.57 Social Assistance $803.77 $210.80

  • $5.20

OAS/GIS

  • $3,534.94

$950.77

  • $128.55

Transfer Income

  • $2,522.30

$1,682.62 $339.81 Total Income

  • $19,932.00
  • $16,029.00
  • $4,014.00

Family Income (PC) Private Sources

  • $4,996.00
  • $6,071.00
  • $2,180.93

Transfer Income

  • $2,357.25
  • $111.30
  • $115.85

Total Income

  • $10,702.00
  • $9,490.00
  • $2,311.40

Below LIM 0.233 0.109 0.009

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Elderly Immigrants 20/21

Summary

  • For recent immigrants 65 and older, individual income is lower in

many dimensions.

  • Overall transfers are lower for YSM 0-9, reflecting much lower

OASGIS benefits.

– Though they collect significantly higher SA

  • The YSM 10-19 group collects even higher transfers than

native-born (mostly due to higher OASGIS).

  • While the individual-income picture is grim, it is less grim when

looking at family-based incomes.

– Though new immigrants 65+ are much more likely to live in poor households.

  • New immigrants aged 60-64 also have very poor outcomes, and

are heavily reliant on SA.

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SLIDE 22

Elderly Immigrants 21/21

Remaining Tasks

  • Use the full Census files: 1996, 2001, and 2006 (when released)

– Evaluate SLID measurement issues (YSM 10-19) – Test for changes over time, exploiting much larger sample sizes – Pursue more immigrant-based comparisons

  • Heterogeneity of outcomes
  • Inequality

– Richer description of immigrant family structure (who do older immigrants live with) – Explore sensitivity of the “per capita” results to more sophisticated adjustments for family composition.