Work and Well-being in an Aging Society

This paper argues that the well-being of all Canadians will be increased by policies that make it easier for individuals to smooth their labour supply more evenly over the life cycle. However, if working longer is to represent an improvement in individual well-being, it must be due to choice, not necessity. The past decade has seen a substantial increase in the lifetime risk exposure of Canadian workers. Since one must expect that this will increase the fraction of future cohorts who arrive at 65 without a private pension or appreciable retirement savings, welfare improving policies to even out labour supply over the life cycle should be complemented by reforms to Employment Insurance to help individuals even out income fluctuations during their working years.