How Has Public Policy Shaped Defined-Benefit Pension Coverage in Canada?

Unlike federal regulation in the United States, variation in provincial regulation across Canada provides a natural laboratory to examine the impact of public policy on pension coverage. Using data from a nationally representative sample of private sector workers in Canada in 1994, we find that higher marginal taxes, earlier vesting, and more permissive eligibility rules increase coverage, while a ban on mandatory retirement has a negative, but insignificant effect. Implications for differences in defined-benefit coverage between Canada and the United States, and pension theory, research, and practice are discussed.