Journal of Social Equity and Public Administration

How Government-Backed Registered Retirement Savings Plans Impact Canadians’ Tax-Free Savings Account:

Does Social Equity Matter?

Gino Biaou

École nationale d’administration publique

Étienne Charbonneau

École nationale d’administration publique

DOI: https://doi.org/10.24926/jsepa.v2i1.5218

Keywords: Tax-free savings accounts, Registered Retirement Savings Plan, Compound theory of social equity, Gender, Education, Wealth

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Abstract

Personal savings can help cushion financial difficulties and reduce the need to apply for government assistance. This study examined who benefits the most and the least from the government-supported Registered Retirement Savings Plan (RRSP) and Tax-Free Savings Account (TFSA). The compound theory of social equity was used to analyze data from the 2019 Canadian Survey of Financial Security. The results suggest that there are disparities in contributions to TFSA and RRSP based on the level of education and gender of single parents. Our analysis using correlation, OLS, and quantile regressions found that there are statistically significant but relatively small differences in contributions for less educated individuals and single-parent families led by women. These findings suggest that governments could focus on financial education, improve financial inclusion policies, and review rules on TFSA and RRSP contribution limits, which could pose a cognitive administrative burden for vulnerable households.

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Author Biographies

Gino Biaou, École nationale d’administration publique

 

Gino Biaou, MSc (he/him/his) (gino.biaou@enap.ca) is a doctoral student at .cole nationale d’administration publique (ENAP) Outaouais campus, Gatineau, QC. He holds a master’s degree in finance from Universit. Laval (Canada) and two bachelor’s degrees from Universit. de Moncton (Canada) and Universit. d’Abomey-Calavi (Bénin). He is interested in financial equity.

Étienne Charbonneau, École nationale d’administration publique

 

Étienne Charbonneau, PhD (etienne.charbonneau@enap.ca) is a professor at ENAP and is a Senior Fellow at the Carsey School of Public Policy at the University of New Hampshire. This is the first research project on social equity since 2009.

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https://doi.org/10.3138/cpp.2016-039