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Evolution of Gender Patterns in Retirement Saving in Canada

Closeup of the word pension in a newspaper.

Canadian researchers observed gender differences in retirement saving patterns based on 38 years of national data. Although women are more likely to save at all ages, they save a smaller amount and tend to be attracted to investments that on average offer a lower rate of return. At the same time, women have a longer life expectancy and must finance a more extended retirement period to ensure they don’t outlive their retirement savings.

Steven F. Lehrer highlighted these challenges in a recent GRI-sponsored publication. Lehrer shared insights gleaned from a large data set and stressed while policies exist to boost retirement savings through participation, asset allocation is as important as the amounts contributed. Journal editor Pierre-Carl Michaud pointed out that key trends include declining labour force participation among young men, and women giving birth later compared to earlier time periods.

Public pension schemes in Canada account for about 70% percent of the total income of retired individuals in Canada. Saving and wealth accumulation has changed in Canada over time due to age effects, period effects such as macroeconomic shocks, and cohort effects.

One result revealed during the presentation was in comparison to men, women saved more over time but accumulate less for their retirement savings. A rising gender gap was observed across income groups for cumulative retirement savings and steepens more sharply as one ages, however since 2002, this situation may be improving. Also hypothesized was marital status could influence asset allocation if single females are more likely to invest in riskier assets than single males. The retirement prospects of future generations are increasingly a source of public concern and the effectiveness of a one-size-fits-all policy was questioned.

The presentation concluded with Michaud highlighting that this research is relevant for the decumulation stage. He also indicated the importance of monitoring heterogeneity in saving behaviour to avoid a gender gap in retirement savings. It is important to focus on how people save for retirement both in terms of amounts as well as in terms of effective rates of return.

Finally, it shows the importance of the intensive margin of investment and may indicate a need to counter the tendency for people to stick with what they have and look for ways to encourage contributions to retirement savings. There can be room for improvement in the choices offered to investors in retirement savings and with these choices, it is key to be able to explain the trade-offs involved.

For more information on this topic, you can read GRI’s sponsored publication: Evolution of Gender Patterns in Retirement Saving in Canada


Steven F. Lehrer headshot

Steven F. Lehrer
Professor, Department of Economics, Queen’s University; Kingston, Ontario; Canada National Bureau of Economic Research, Cambridge, Massachusetts, United States  

Steven Lehrer is a Professor of Economics at Queen’s University and a research associate at the National Bureau of Economic Research (NBER). His research focuses on using empirical methods to address topics in the health economics, economics of education and experimental economics literature.

pierre-carl michaud headshot

Pierre-Carl Michaud
Professor, Department of Applied Economics, HEC Montréal  
Pierre-Carl Michaud holds a Ph.D. in economics from Tilburg University in the Netherlands. Professor at the Department of Applied Economics since 2016, he also holds the Jacques-Parizeau Research Chair in Economic Policy and is the Scientific Director of the Retirement and Savings Institute of HEC Montréal. His research aims to understand life-cycle behaviour along several dimensions including savings, insurance, and pensions, as well as health investments and the economic consequences of demographic change. He has also carried out research in the areas of household finances and long-term care costs and financing.