Seniors: encouraging trends

Québec, June 27, 2007 – Five main observations stem from a new study conducted by the Institut de la statistique du Québec: the contribution of people 65 years of age or older to the funding of public expenditures is growing; the rise in social expenditure per person has been modest since 1991; the standard of living of seniors is improving from several standpoints; certain groups will remain vulnerable; and changes are to be anticipated in the sociodemographic characteristics of the elderly population. These findings are from the study entitled Vie des générations et personnes âgées : aujourd’hui et demain (the life course of birth cohorts and the elderly: today and tomorrow), Volume 2.

A growing contribution by seniors to the funding of public expenditures

In 2004, government revenues accounted for 42% of Québec’s gross domestic product (GDP) and seniors funded about 12% of them. The average contribution of a person 65 years of age or older to the funding of public expenditures, compared with that of a person 20 to 64 years of age, grew from 50% in 1981 to 61% in 2004.

Given the aging of the population, an increasing share of government revenues will depend on the income of seniors. For example, with a constant profile according to age, seniors will provide over 20% of government revenue in roughly a quarter of a century. To fund the disparity between all expenditures and revenues generated by the effect of demographic changes alone over the next five decades (excluding the Québec Pension Plan), an additional increase of 0.29% a year in government revenues (in constant dollars) is required.

A modest rise in social expenditure per person since 1991

In 2003, each major demographic group received a significant share of social expenditures: 29.2% for young people, 36.6% for adults of working age and 34.2% for seniors. However, since the size of each group are very different, their average expenditure varies greatly. Expenditure for an elderly person is an average of 2.0 times that for a young person and 4.4 times that for an adult of working age.

Social expenditure per person has risen 9.2% since 1991, compared with 352% between 1961 and 1991. Another characteristic of the 1991-2003 period is the great variation among age groups: the average expenditure increased for an elderly person (12.6%) and rose a little more for a young person (16.4%), but decreased for a person 20 to 64 years of age (-4.9%).

Be it in regard to families, workers, the disadvantaged or seniors, what is true today in no way resembles what existed in the mid-20th century. Current seniors have experienced, at different stages in their life course, an improvement in social programs. As for new generations, they avail themselves from birth of a system that has achieved maturity.

A number of socioeconomic trends favour the standard of living of the elderly

Certain trends will favour the residential autonomy of tomorrow’s seniors. For example, the proportion of elderly households that own their home should increase. A total of 68.5% of households supported by 55-to-64-year-olds were homeowners in 2001, an increase of three points compared with preceding generations at the same age. Two other conditions will foster their autonomy: an increasing number of elderly men and women have a driver’s licence and an automobile.

The average wealth of family units supported by 50-to-59-year-olds almost doubled between 1984 and 1999. The greater proportion of homeowners is likely to increase the non-financial assets of those households, since the principal residence is the major component of those assets (26% of total assets).

Elderly workers will be better trained and will include a growing proportion of women. Among 55-to-59-year-old men, the probability of still working at 60-64 years of age increased from 55% to 61% between 1992-1997 and 1997-2002. For their part, women in their 50s were very active on the labour market: upon retirement they will have more income from independent sources.

Vulnerable groups

A high proportion of tenant households must bear a rather heavy burden of housing-related expenses: 42% of these households supported by 65-to-74-year-olds spend 30% or more of their income on housing. The proportion is the same for tenant households supported by 55-to-64-year-olds, a situation that is certainly not encouraging in terms of financial preparation for the golden years.

The study targeted a number of vulnerable socioeconomic groups among the first baby boomers (the 1946-1955 generations) in regard to financial preparation for their senior years: immigrants and people with little schooling, for instance. It is estimated that approximately 5% of the first baby boomers, i.e. about 60,000 people, run a serious risk of financial insecurity at retirement.

Among family units supported by people 65 or older, 37% have no private retirement assets. The situation is slightly better among units supported by 55-to-64-year-olds (27%). These units, which generally earn low employment income, form a vulnerable group in terms of financial security in their latter years.

New sociodemographic characteristics

All Québec regions will experience a marked increase in the proportion of people 65 years of age or over. In 2026, some regions will have to deal with populations more than 30% of which are elderly, compared with 24% for Québec as a whole. That aging is found to a great extent in the current age structure of regional populations, dominated by many baby-boom cohorts, the first of which are now on the threshold of becoming seniors. According to the region, migratory movements will amplify or alleviate the phenomenon.

Changes among immigrants who will be 65 years of age or older (people who obtained Canadian immigrant status at one point in their lives) are to be anticipated. Future elderly immigrants (those who were 45-64 years of age in 2001), 68% of whom will be concentrated on the island of Montréal, will be more diversified in origin, with a greater proportion of visible minorities and of people who know French and English.

The generation analysis shows that, in the upcoming five-year periods, a greater proportion of people will live together as couples, the proportion of childless people will decline and a network of brothers and sisters will continue to be substantial. However, the situation will be very different for generations born in the second half of the 20th century, who have experienced a significant drop in fertility and profound upheavals in married life.

The Institut de la statistique du Québec produces and disseminates relevant, reliable, and timely statistical information on the socioeconomic development of Québec. It is the central authority for the production and dissemination of official statistical information for Québec government departments and agencies. It is also responsible for conducting statistical surveys of general interest.

Sources :

• Hervé Gauthier
  Demographer
  Phone: (418) 691-2411, ext. 3111
  Institut de la statistique du Québec

• Yves Nobert
  In charge of housing
  Phone: (418) 691-2411, ext. 3221
  Research Officer
  Institut de la statistique du Québec

• Information and Documentation Centre (ISQ)
  Phone: (418) 691-2401
  or 1-800-463-4090 (toll free in Canada and the United States)