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 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. Elderly Immigrants 1/21
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. Elderly Immigrants 2/21
Figure 1: Immigration by Class Immigration by class: All ages 1 Share of total immigration by class .75 .5 .25 0 1980 1985 1990 1995 2000 2005 Year Economic Family Refugee Elderly Immigrants 3/21
Figure 2: Share of Immigration by Age Immigration by age .2 Share of total immigration by age group .15 .1 .05 0 1980 1985 1990 1995 2000 2005 Year 45-64 year olds 65+ year olds Elderly Immigrants 4/21
Figure 3: Class of Immigration: 45 to 64 Immigration by class: 45 to 64 years old 1 Share of total immigration by class .75 .5 .25 0 1980 1985 1990 1995 2000 2005 Year Economic Class Family Class Refugee Class Elderly Immigrants 5/21
Figure 4: Class of Immigration: 65 and older Immigration by class: 65 and older 1 Share of total immigration by class .75 .5 .25 0 1980 1985 1990 1995 2000 2005 Year Economic Class Family Class Refugee Class Elderly Immigrants 6/21
Figure 5: Older Immigrants in the Family Class Age composition of family class Share of family immigration by age group .25 .2 .15 .1 .05 1980 1985 1990 1995 2000 2005 Year 45-64 year olds 65+ year olds Elderly Immigrants 7/21
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 of 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) Elderly Immigrants 8/21
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). Elderly Immigrants 9/21
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. Elderly Immigrants 10/21
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 Elderly Immigrants 11/21
Regression Specification • While means are useful, given sample sizes we pool across time periods. • Estimates “regression adjusted” for a variety of factors: 4 3 4 3 L � � � � � y it = � + � j � AGEG ji + � k � YSM ki + � kj � YSM ki � AGEG ji + � YD it + � � l � LOC li + � it j = 1 k = 1 j = 1 k = 1 l = 1 • Key controls: – Age – YSM (and interactions) – Unrestricted Year Dummies – Location Dummies • Can construct regression adjusted mean differences across groups. – Also yields standard errors Elderly Immigrants 12/21
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+). Elderly Immigrants 13/21
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 Elderly Immigrants 14/21
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 Elderly Immigrants 15/21
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 Elderly Immigrants 16/21
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 Elderly Immigrants 17/21
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