The Unequal Burden of Retirement Reform: Evidence from Australia

64 Pages Posted: 10 Jul 2019

See all articles by Todd Morris

Todd Morris

University of Melbourne - Department of Economics

Date Written: July 5, 2019

Abstract

As many governments raise eligibility ages for retirement benefits, there are concerns that such reforms disproportionately affect poorer households. In this paper, I examine the distributional effects of a 1994 Australian reform that increased women’s pension-eligibility age from 60 to 65. Using detailed longitudinal data, I find strong negative effects on household incomes for low-to-middle-income households but little impact on high-income households. The unequal impacts meant that, among affected households, the reform increased relative poverty rates by 33 to 39 percent and inequality measures by 12 to 15 percent. These results demonstrate that such reforms can be significantly regressive.

Keywords: retirement age, distributional effects, poverty, inequality

JEL Classification: H55, I38, J26

Suggested Citation

Morris, Todd, The Unequal Burden of Retirement Reform: Evidence from Australia (July 5, 2019). Available at SSRN: https://ssrn.com/abstract=3416304 or http://dx.doi.org/10.2139/ssrn.3416304

Todd Morris (Contact Author)

University of Melbourne - Department of Economics ( email )

Melbourne, 3010
Australia

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