Population Aging and Worklife Duration : Myths and Realities in the Canadian Context

Population ageing has brought concerns about labour shortage and public finance sustainability. These concerns spread out from the assumption that an increased age-based dependency ratio is a synonym of shrinking working lifespan for financing extending lifecycle consumption. Such a conclusion usually omits an appropriate account of the changes in labour force participation and hours worked (behavioural components). However, these factors could be playing toward or against the tides of populating ageing (structural components) throughout the lifecycle. This paper estimates worklife duration in Canada and decomposes the change between 1981 and 2016 into demographic and behavioural components.We found that contrary to popular opinions, individuals are working longer than before. Furthermore, they are spending a higher proportion of their increased longevity in the labour market. Overall, worklife duration increased by 4.96 years while its ratio to life expectancy increased by 3.55 percentage points. labour force participation has been the main driver of these changes contributing, 3.57 years, against 0.73 and 0.65 years for worked hours and mortality respectively.These results bring counterarguments to the discussion around increasing the official retirement age on the assumption of shrinking working lifespan for financing a more extended retirement period