Economic and Social Reports
Employment by choice and necessity among Canadian-born and immigrant seniors

As Canada’s population gets older and life expectancy keeps increasing, Canadian-born and immigrant seniors may alleviate downward pressures on the overall employment rate through their involvement in the labour market.

Many seniors work past their mid-60s for various reasons. Some find it necessary to keep working because of inadequate retirement savings, mortgage payments, unforeseen expenses, or the responsibility to support children and other family members in Canada or abroad. Others choose to work to provide a sense of personal fulfillment, stay active and remain engaged.

Working by choice rather than necessity may have important implications for the well-being of seniors. Furthermore, data on employment by choice and necessity may help employers and policy makers understand the factors that influence seniors’ retirement decisions.

To shed light on this issue, this article uses data from the Labour Force Survey (LFS) and examines the degree to which Canadian-born and immigrant seniors aged 65 to 74 worked by choice or necessity in 2022.^Note 

One in five seniors aged 65 to 74 worked in 2022—almost half of them by necessity

Of all Canadian-born and immigrant seniors aged 65 to 74, 21% were employed in 2022. Nine percent reported working by necessity and 12% reported working by choice. Those working by necessity represented 351,000 individuals that year.^Note 

Immigrant seniors were more likely than their Canadian-born counterparts to work by necessity in 2022. Of all immigrant men aged 65 to 74, 15% reported working by necessity in 2022 (Table 1). The corresponding percentage was 9% for Canadian-born men.^Note  Immigrant women (9%) were also more likely than Canadian-born women (6%) to report working by necessity.^Note 



The degree to which immigrants worked by necessity in 2022 varied across population groups. About 20% of Black, Filipino or South Asian immigrant men reported working by necessity that year, compared with 8% of Chinese immigrant men and 12% of White immigrant men. Black immigrant women (12%) and Filipino immigrant women (13%) were also more likely than Chinese immigrant women (6%) to report working by necessity.

Canadian-born and immigrant men living in a rented dwelling were more likely to work by necessity than homeowners. For example, 19% of immigrant men living in a rented dwelling reported working by necessity in 2022, compared with 14% of their counterparts who owned a home. Since housing wealth is a significant wealth component for most Canadians (Morissette, 2019) and most individuals aged 65 to 74 are homeowners (Hou, 2010), living in a rented dwelling likely reflects fewer financial resources and a greater need to sustain employment.

Meanwhile, Canadian-born and immigrant women who were married or in a common-law relationship worked by necessity to a lesser extent than women who had no spouse.

Regardless of immigrant status and gender, seniors aged 70 to 74 were less likely to be employed, be it by choice or by necessity, than seniors aged 65 to 69.

While the propensity of seniors to work by necessity varied by age, marital status, immigrant status, population group and homeownership status, it did not vary substantially across education levels. For example, 8% of Canadian-born men with a bachelor’s degree reported working by necessity in 2022, a proportion similar to that reported by their counterparts with no high school diploma (9%). However, the percentage of seniors who worked by choice increased markedly with education, thereby explaining entirely—in an accounting sense—why seniors’ employment rates increased with education.^Note 

Seniors who worked by necessity earned lower wages and held jobs with lower skill requirements

Seniors who worked by necessity in 2022 were less likely to be self-employed and more likely to work full time than those who worked by choice. For instance, 78% of immigrant men working by necessity held full-time jobs, while the figure stood at 67% among those working by choice (Table 2). The difference, at 24 percentage points, was even larger among Canadian-born men.



Differences in seniors’ industry of employment are also observed. Senior men who worked by necessity were more often employed in manufacturing and in transportation and warehousing—two sectors that typically provide blue-collar jobs—than senior men who worked by choice. Senior women who worked by necessity were more often employed in retail trade and in administrative and support, waste management and remediation services than those who worked by choice.

Seniors who worked by necessity also held jobs that require high levels of training, education and experience less often than seniors who worked by choice. The difference was particularly pronounced among immigrant men. Among those working by necessity, 26% held managerial or professional positions (TEER^Note  categories 0 and 1) in 2022. Among those working by choice, the corresponding percentage stood at 46%, a 20 percentage point difference.

Part of these differences resulted from differences in seniors’ socioeconomic characteristics. For example, human capital and demographic factors—age, education, marital status and age at immigration (for immigrants)—accounted for one-fifth of the 20 percentage point difference noted above. However, these factors accounted for approximately 60% of the corresponding differences observed among Canadian-born men and immigrant women, and 90% of the difference observed among Canadian-born women.

Regardless of immigrant status, male and female employees who worked by necessity earned lower wages than those who worked by choice. The difference in average hourly wages between the two groups was significant, reaching 25% for immigrant men, 15% for Canadian-born men, 13% for immigrant women and 12% for Canadian-born women. Even after controlling for differences in human capital, demographic factors and selected job characteristics,^Note  most of these wage differences persisted. Depending on the gender–immigrant status cell considered, 54% to 63% of the wage differences observed between the two groups of employees—those working by necessity versus those working by choice—remained after controlling for these covariates. This implies that other factors that are not observed in the LFS—for example, workers’ ability, field of study and whether one works in a high-paying firm—drive the remaining wage differences.

Conclusion

In recent years, the aging of the Canadian workforce has led to numerous discussions on how to increase Canada’s aggregate labour supply. As life expectancy rises and physically demanding jobs account for a smaller share of jobs than they did in the past, seniors are one segment of the labour force for which increases in labour force participation rates are potentially feasible. While changes in the participation rates of seniors have been documented in the past (Uppal, 2010), the degree to which seniors work by necessity rather than by choice has not been documented to date.

This article fills this gap and shows that, overall, close to 1 in 10 seniors aged 65 to 74 reported working by necessity in 2022. Some groups of seniors with higher financial vulnerability, such as immigrants, women with no spouse and men living in rented dwellings, were more likely than others to work by necessity.

Compared with seniors who worked by choice, seniors who worked by necessity received lower wages and were more likely to hold jobs that required relatively little training, education and experience.

Taken together, these findings suggest that a number of seniors who work by necessity are more economically vulnerable than their counterparts who work by choice. Whether this is the case requires a detailed assessment of all their sources of income and wealth holdings, which is a task left for future research.

Lastly, it should be noted that the employment decisions of some seniors, as measured in 2022, may have been partly influenced by the COVID-19 pandemic. Whether the percentages of seniors working by choice or necessity were the same before the pandemic remains an open question.

Authors

René Morissette and Feng Hou are with the Social Analysis and Modelling Division, Analytical Studies and Modelling Branch, at Statistics Canada.

References

Hou, F. (2010). Homeownership over the life course of Canadians: Evidence from Canadian censuses of population. Analytical Studies Branch Research Paper Series, no. 325.

Morissette, R. (2019). The wealth of immigrant families in Canada. Analytical Studies Branch Research Paper Series, no. 422. Statistics Canada Catalogue no. 11F0019M. Ottawa: Statistics Canada.

Picot, G. & Lu, Y. (2017). Chronic low income among immigrants in Canada and its communities. Analytical Studies Branch Research Paper Series, no. 397. Statistics Canada Catalogue no. 11F0019M.

Uppal, S. (2010). Labour market activity among seniors, Perspectives on Labour and Income, Statistics Canada Catalogue no. 75-001-X, Vo. 11, No. 7, pp. 5-18.