HOMEMAKER PENSIONS AND LIFETIME REDISTRIBUTION

There has been considerable public debate in Canada on the merits of proposals to extend coverage under the public earnings-related pension system (the Canada and Quebec Pension Plans or C/QPP) to homemakers. This paper presents an analysis of one such proposal put forward by a Parliamentary Committee in 1983. The analysis considers both the likely costs and the redistributional impact of this homemaker pension proposal, based on a Monte Carlo lifecycle microsimulation model. The main results are first that the proposal tends to be mildly redistributive from higher to lower lifetime income groups. Secondly, the proposal is of not as much benefit to women as might be expected-it is almost equal in value to men and women. This later conclusion is the result of the fact that the homemaker pension provision was part of a package tl at also included splitting of pension credits accrued during marriage.