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The Canadian Survey of Consumer Finances (SCF) is an annual supplement to the nationally representative monthly Labour Force Survey (LFS), conducted each April. The SCF contains data on labour force attachment, demographics, and income. There is survey data collected for individuals from April 1982 onwards, with the exception of April 1984. Family level data was also collected every other year from 1976 to 1980.¹⁴ The analysis presented in this report uses the surveys from April 1985-86 as the "before" period, and those from April 1987-89 as the "after" period.¹⁵ The earlier surveys are not used in the base case analysis because there is no April 1984 survey. However, the 1982 and 1983 data is used in a specification check. The later surveys are not used because there was a major change in the classification of the education variable in April 1990, rendering it difficult to follow precise education groups from before 1990 to after. Following educational groups is a key feature of the approach used in this report to measure potential DI benefits. Also, the selected set of years avoids the contamination of estimates by the recessions of the early 1980s and early 1990s, which might affect older workers propensity to apply to the DI program.¹⁶

The analysis focuses on men age 45-59. The focus on men follows the previous literature on DI. Also, the analysis must use cross-sectional data on a worker's labour force attachment, and this type of data does not indicate whether that worker has the requisite earnings history to be eligible for the DI program. This problem is minimized by focusing the analysis on older men, because older men generally have sufficient earnings histories to qualify for DI benefits.

The choice of age group is also dictated by two other considerations. First, the age group was chosen so that the workers are old enough for DI to be a relevant option in their choice set. For the 45 to 59 age group, the incidence of DI benefits for men in the CPP is 3.9 percent. This is 4 times as high as the incidence of DI benefits among those age 40 to 44. Second, as was noted earlier, the increase in DI benefits under the CPP was not the only important policy change in 1987. There was also a reduction in the age of eligibility for CPP retirement benefits to 60, which the analysis seeks to avoid by focusing on those below age 60.

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Footnotes

14	There are actually some family surveys for some earlier years, but differences in the definition of the education variable render them useless for the purposes of this study.
15	The policy change of interest was enacted in July, 1986, and became effective in January, 1987; since the 'before period' ends in April, 1986, any anticipatory labour force leaving behavior between the enactment and effective dates is avoided.
16	See Lewin-VHI (1996) for evidence on the cyclical responsiveness of DI applications.