Understanding the Retirement Savings of Self-Employed Tradespeople in Australia

26 Pages Posted: 21 Jun 2019

See all articles by Aaron Elkhishin

Aaron Elkhishin

affiliation not provided to SSRN

Tracey West

Griffith University

Kirsten MacDonald

Griffith University

Date Written: June 16, 2019

Abstract

Self-employed tradespeople, like many business owners, face income uncertainty risk. In Australia, self-employed people are excluded from compulsory superannuation. We quantify financial decisions self-employed tradespeople make in retirement preparation, relative to employed tradespeople. We find that they are less likely to hold superannuation assets and more likely to hold business assets and trusts. They also have higher levels of wealth in family homes, other property and equities. We argue that while self-employed tradespeople are relatively wealthier, superannuation exclusion has macroeconomic impacts, like higher charge rates for construction. Moreover, self-employed tradespeople are vulnerable to market conditions when liquidating their business assets.

Keywords: Superannuation; retirement; business owners; tradespeople; investment property

JEL Classification: J180, J780

Suggested Citation

Elkhishin, Aaron and West, Tracey and MacDonald, Kirsten, Understanding the Retirement Savings of Self-Employed Tradespeople in Australia (June 16, 2019). Available at SSRN: https://ssrn.com/abstract=3404744 or http://dx.doi.org/10.2139/ssrn.3404744

Aaron Elkhishin

affiliation not provided to SSRN

Tracey West (Contact Author)

Griffith University ( email )

170 Kessels Road
Nathan, Queensland QLD 4111
Australia

Kirsten MacDonald

Griffith University ( email )

Brisbane, Queensland 4111
Australia

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
38
Abstract Views
395
PlumX Metrics