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Study: The Effects of Education on Canadians' Retirement Savings Behaviour

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Released: 2017-03-27

Higher levels of educational attainment are estimated to directly increase the savings and wealth accumulation of Canadians—even after taking into account income and other personal characteristics known to indirectly affect savings behaviour.

A new study, "The effects of education on Canadians' retirement savings behaviour," assesses the relationships between education, financial literacy, savings and wealth. The study addresses a long standing information gap around the direct impacts of education on savings and wealth outcomes, and provides new insights on the long-run returns to education.

The study takes into account the various ways that education may indirectly affect savings, including family composition, labour earnings and permanent income, home values and health. The findings suggest that completing high school increases savings rates in tax-preferred retirement accounts by 2 to 6 percentage points annually, on average, among individuals aged 20 to 59.

This study also assesses whether educational attainment affects the extent to which workers adjust their savings across various vehicles in response to automatic pension contributions in registered pension plans (RPPs). Among all workers, a one dollar automatic RPP contribution is estimated to induce workers to reduce their contributions to registered retirement savings plans (RRSPs) by 53 cents.

However, individuals with higher levels of schooling are found to make the largest adjustment to their savings in RRSPs. Individuals with a university degree, for example, reduce RRSP contributions by 69 cents per dollar contributed in RPPs. This compares with individuals with less than high school who make no adjustment at all to their RRSP contributions. These results take into account income and RRSP contribution limits, and for methodological reasons, are based on workers who earn close to the average industrial wage.

Finally, the study shows that individuals with more schooling tend to have a better understanding of financial market concepts, such as how inflation affects the future value of savings and the relative risks of different savings options.


The research paper "The Effects of Education on Canadians' Retirement Savings Behaviour," part of the Analytical Studies Branch Research Paper Series (Catalogue number11F0019M), is now available.

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To enquire about the concepts, methods or data quality of this release, contact contact Derek Messacar (709-351-1018;, Social Analysis and Modelling Division.

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