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A model of the labor supply determinants of Canada’s elderly population Tanner, Tremain


This study examines Canada's aging trend, the factors influencing the elderly's withdrawal from the labour force, and the implications of the two trends for planners and policy makers. Canada's population is aging. The absolute and relative number of people 65 and over is projected to increase well into the twenty-first century. Over this same period of time the elderly, defined as those persons 65 and over, are expected to reduce their participation in the labour force. With a greater proportion of elderly in the population and fewer of them working the costs and burdens involved with supporting this segment of the population will increase. It is important, therefore, that planners and policy makers understand why the population is aging, why the elderly are withdrawing from the labour force, and what the possible economic and social implications of these trends are. Based on explanatory models of the elderly's labour force participation constructed mainly by researchers in the United States, a .multiple regression analysis is conducted which attempts to evaluate those variables included in an explanatory equation which accounts for the variance in the elderly's labour force participation rate in Canada. Cross-section analyses are conducted for three years—1961, 1971, and 1976—with data derived principally from Statistics Canada census sources and aggregated at the provincial level. In contrast to studies originating in the United States, the results obtained in this study found pension benefits were not the most significant factor in explaining the decline in the elderly’s labour force participation in Canada. Both the unemployment rate and the occupation chosen by an elderly labour force participant consistently proved to be more significant factors in accounting for the variance in the elderly's labour force participation rate in Canada. The economic and social implications of a society which is aging and one in which an increasing number of elderly are choosing not to work are discussed. The two areas in which future planners and policy makers will face the most pressing problems in terms of funding and program delivery are the public pension and health care services. There will be a number of other areas affected by the increased incidence of elderly retired persons in the population. It is important, therefore, that research be conducted today, at all levels, into the various impacts a large proportionate increase in non-working elderly will have on Canadian society in the future.

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