A. “The Impact of Age Pension Eligibility Age on Retirement and Program Dependence: Evidence from an Australian Experiment,” by Kadir Atalay and Garry F. Barrett (SEDAP Working Paper No. 295, May 2012, .pdf format, 43p.)
Abstract:
Identifying the effect of the financial incentives created by social security systems on the retirement behaviour of individuals requires exogenous variation in program parameters. In this paper we study the 1993 Australian Age Pension reform which increased the eligibility age for women to access the social security benefit. We find economically significant responses to the increase in the Age Pension eligibility age. An increase in the eligibility age of 1 year induced a decline in retirement probability by approximately 10 percent. In addition, we find that the social security reform induced significant \program substitution.” The rise in the Age Pension eligibility age had an unintended consequence of increasing enrolment in other social insurance programs, particularly the Disability Support Pension, which functioned as an alternative source for funding retirement.
socserv.mcmaster.ca/sedap/p/sedap295.pdf
B. “Changes in Subjective Well-being with Retirement: Assessing Savings Adequacy in Australia,” by Garry F. Barrett and Milica Kecmanovic (SEDAP Working Paper No. 296, May 2012, .pdf format, 33p.)
Abstract:
Does retirement represent a state of relative prosperity or a time of unanticipated economic hardship? To assess whether individuals are successful in smoothing their well-being across the transition to retirement we analyse measures of relative subjective wellbeing (SWB) in the Australian HILDA Survey. Specifically, this research examines individual’s self-reported change in their standard of living, financial security, and overall happiness over the transition to retirement. It is found SWB either improves or remains constant for the large majority of individuals as they retire from the labour force. However, there are significant disparities in changes in well-being with retirement among retirees. In particular, the subset of individuals who are forced to retire early due to job loss or their own health, and who find their income in retirement to be much less than expected, report marked declines in their well-being in retirement.
