Thank you very much, Chairman, and thank you for standing in at the last minute to take over this committee.
It was my great pleasure and privilege yesterday to talk to the Senate finance committee. I must apologize to the members of this committee for the fact that I was earlier supposed to give evidence by a video conference link from Paris but was unable to do so because I was suffering from the flu.
At OECD we have just begun a research project on women and pensions, exactly following the topic that you are studying in this committee. I must first of all thank Human Resources and Skills Development Canada, who have made a voluntary contribution towards that research. As I have said, that research is just beginning, and therefore I'm not really in a position today to be able to give particularly concrete results of that research but am more able to set out the areas of interest and concern that we are exploring.
If we think about pension systems from first principles, if we have a world where we have men who go out to work and women who stay at home and look after children and have those caring responsibilities, then it is quite easy and simple to devise a pension system to suit that world of the single male breadwinner. If men and women participate in the labour market on equal terms, if they have similar hours of work, similar earning levels, and they work a similar number of years over their career, then equally it is very simple to devise a pension system that suits a world of that form.
The trouble is, most countries are in a transition. Countries have been moving at different paces, but they are all moving in the same direction away from the single male breadwinner model towards a model of much more equality in the labour market between men and women. But our preliminary analysis suggests that we are still quite a long way from a position of there being equality between men and women in the labour market.
It is the experience in the labour market that very much affects, almost determines, people's incomes in retirement. Women tend to work fewer hours than men do. They have career breaks caring for children, caring for elderly relatives, so they have a shorter career in total than men do, and women still have lower hourly wages generally than men.
There is also an issue about access to pensions. In countries such as Canada, but also the United States, the United Kingdom, and Ireland, we have pension systems that are very much dependent on voluntary private pension provision, often through occupational schemes, through employer-run schemes, with the registered retirement plans in Canada being the case. We find when we look at the data that women tend to work for employers and in the occupations and industries where coverage of those private pensions is much lower than it is for the population as a whole.
We have also looked in great detail at the situation of today's retirees and the incomes and poverty rates among today's retirees. Overall we find marginally higher rates of old age income poverty for women than for men, but only slightly more. I think for the OECD countries as a whole, the old age poverty rate is about 10% for men and about 13% for women. So there is a small difference, and when we look in closer detail at the information, it's mainly the position of very old widows who are the remaining pocket of poverty among older people.
Canada is, in terms of old age poverty, one of the highest-performing of OECD countries. It has the fifth-lowest old age poverty rate among the 30 OECD countries, around 4%, compared with the OECD average of around 13%.
These issues are not currently a huge problem, I think, for Canada, but they may well be in the future. We are going to be in a world where we're rather more dependent on private pensions for our incomes in old age, and so that's the issue of the coverage of private pensions of women, I think, and obviously there is concern.
There are also social developments, particularly the increasing prevalence of divorce. We are, compared with past generations, going to see many women moving into retirement who have been divorced or have been lone parents and so maybe have not been able to build up much pension in their own right because they have not been able to work quite so much whilst their children have been at young ages. I think those are very important issues that we need to look at.
The issue of divorce, of course, brings us into a very complex set of areas. I am an economist, not a lawyer, and would not claim to be an expert on divorce law, but that, I think, is an issue that needs to addressed as we go into the future.
I'll wind up my brief opening statement there. I look forward to your questions. We'll try to answer them.