Study: The death of a spouse and the impact on income

1993 to 2003

July 10, 2006 – Senior women suffered economically from widowhood, much more than senior men, according to a new study.

Senior widows saw their median family adjusted income decline continuously in the five years following the loss of their husband. On the other hand, widowers’ median adjusted income was higher five years after the wife’s death when compared to the year before that event.

More precisely, adjusted income declined continuously among senior women during widowhood. Five years after the death of the spouse, senior women saw their adjusted income decline by more than 15%, from $25,800 one year prior to widowhood.

Widowers walked a much different path. The adjusted median income one year before widowhood amounted to $27,800 among senior men who lost their spouse. After five years of widowhood, at $29,400, it was 5.8% higher than in the year before widowhood.

Overall, 51% of widowers suffered a loss of adjusted income after five years of widowhood compared with 72% of widows.

Not only did widows’ adjusted income decline, more of them fell below the low-income threshold following widowhood. After five years of widowhood, 8.7% of widows were living in low income, compared with 5.1% of widowers.

For widows, the loss came mainly from lower pension income and earnings. For widowers, lower earnings contributed the most to the decrease in adjusted income.

Widowhood affects women at all income levels

The study also evaluated whether the economic consequences of widowhood varied for men and women at different income levels. To do so, all widows and widowers were ranked on the basis of their adjusted family income the year preceding the death of their spouse, and then divided into four equal groups called quartiles.

In this article, total family income before taxes and expressed in constant 2003 dollars is used as a measure of income. Income is further adjusted to take into account family size and composition.

An assumption is made that a drop in family size, all things being equal, should be associated with a redistribution of the family income. Therefore, the loss of a spouse may be associated with an increase in adjusted family income even if the unadjusted family income did not change.

Widows in all four quartiles saw an overall and substantial decline in adjusted income. Five years after the death of the husband, the richest widows (those in the fourth quartile) experienced an 8.6% decline, compared with a 9.8% drop among the poorest.

On the other hand, the consequences of widowhood at each income quartile for senior men were different compared with those of widows. The poorest widowers saw a small decline in their adjusted income five years after the death of their wife compared with one year before while all other widowers ended the period with an increase in adjusted income.

Sources of income change due to widowhood

Loss of pension income affected widows the most among those who suffered a loss. This component contributed 28.6% of the loss in adjusted income for these women. On the other hand, pensions played a minor role for widowers, contributing only 1.1%.

For widowers, lower earnings contributed the most to the loss of adjusted income while it was the second most important source of decrease for widows.

For some individuals, the deceased spouse was still active in the labour market at the time of their death, so earnings contributed an important share of the family’s income.

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