PensionReforms' summary and comments
This report is about the allocation of wealth between the sexes in Canada - the so-called "gendering of assets".  The report tests the "differential exposure hypothesis" (reduced access to aspects of life that foster wealth creation, including the "gendering of work and family life") and the "differential vulnerability hypothesis" (different incomes and lower socio-economic conditions).

Typical studies of wealth focus on the household because assets are usually not owned separately in households of more than one.  The report suggests that this disguises the true position of wealth held by women.  It tries to look inside households by attaching "the asset/wealth data from the family file to the respondent's information..." Respondents are age 45 and over.

"The findings show very clearly that, compared to men, women face a reduced ability to build up and secure a safety net of savings. .. On average, women have accumulated about two-thirds of what men have. And, there are specific groups of women, the separated and divorced women, in particular, who have much less than that. The wealth disparity is compounded by the demographic fact that women, on average, live five years longer than men. This being the case, one would expect that women would need more assets than men do."

The findings from this study support the differential exposure hypothesis and here is some support for the differential vulnerability hypothesis. 

"Women who are divorced or widowed have less wealth than their male counterparts net of other factors. And never married men have accumulated less wealth than never married women. Men who live common law have more assets than do their female counterparts (which may explain their reluctance to marry). Although Canadian law stipulates an equal division of assets (with some exceptions such as a pre-marital agreement, some inheritances, assets brought into the marriage etc.), women fare less well than men after a marital dissolution. Their non-financial assets are about equal [to] men's yet their financial assets are much less." 

The report suggests that "Wealth (i.e., net assets) is an imperfect measure of economic well-being in retirement, as not all sources of wealth are easily transferred into income. For example, many older people are reluctant to sell their homes to provide the income they may need in retirement, they may be asset rich, but income poor. Since women are more likely than men to hold a greater proportion of their wealth in non-financial assets, using wealth as a measure of economic well-being in retirement may be masking older women's poverty."

Yes, but . the report looks just at private wealth (including employment-related pensions).  Significantly, it takes no account of "public" wealth - the income to which the respondents might be entitled from the state under various state schemes.

That means it misses the implications of the income-tested Old Age Security Pension and the Guaranteed Income Supplement, both of which are intended to smooth out inequalities in private provision.  Also, because these are life pensions, women have more public wealth in these respects (for a given annual amount) than do men. Of course, for precisely these reasons they need more wealth from public transfers to prevent poverty in old age.

The Canada Pension Plan (and its Québécois equivalent) is work and pay-related so employment-related inequalities will be reflected in these public retirement pensions.

So, owning a debt-free home with few financial assets might be a rational option for a retired woman.  The home's economic value is in the rent not paid were the home not owned.

PensionReforms suggests that wealth of all kinds should be included before conclusions can be finalised in this important area.  Missing out state-derived wealth seems a significant shortcoming, particularly as that would favour women.  (File size 95KB)  149