Advanced Search
MyIDEAS: Login to save this paper or follow this series

Portfolio Allocation in the Face of a Means-Tested Public Pension

Contents:

Author Info

  • Cobb-Clark, Deborah A.

    ()
    (University of Melbourne)

  • Hildebrand, Vincent A.

    ()
    (York University, Canada)

Abstract

Is there evidence that households adjust their asset portfolios just prior to retirement in response to a means-tested public pension? We address this question by estimating a system of asset equations constrained to add up to net worth. We find little evidence that in 2006 healthy households or couples responded to the incentives embedded in the means test determining pension eligibility by reallocating their assets. While there are some significant differences in asset portfolios associated with being near the income threshold, being of pensionable age, and being in poor health these differences are often only marginally significant, are not robust across time, and are not clearly consistent with the incentives inherent in the pension eligibility rules. In 2006, any behavioral response to the means test seems to occur among single pensioners in poor health. Comparison with 2002 results suggests the incentives to reallocate assets may have weakened over time.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://ftp.iza.org/dp4481.pdf
Download Restriction: no

Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 4481.

as in new window
Length: 39 pages
Date of creation: Oct 2009
Date of revision:
Handle: RePEc:iza:izadps:dp4481

Contact details of provider:
Postal: IZA, P.O. Box 7240, D-53072 Bonn, Germany
Phone: +49 228 3894 223
Fax: +49 228 3894 180
Web page: http://www.iza.org

Order Information:
Postal: IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany
Email:

Related research

Keywords: household wealth; public pension; means testing; asset portfolios;

Other versions of this item:

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. James P. Smith, 1999. "Healthy Bodies and Thick Wallets: The Dual Relation between Health and Economic Status," Journal of Economic Perspectives, American Economic Association, American Economic Association, vol. 13(2), pages 145-166, Spring.
  2. Pierre-Carl Michaud & Arthur van Soest, 2004. "Health and Wealth of Elderly Couples: Causality Tests Using Dynamic Panel Data Models," Working Papers, RAND Corporation Publications Department 191, RAND Corporation Publications Department.
  3. David M. Blau, 2008. "Retirement and Consumption in a Life Cycle Model," Journal of Labor Economics, University of Chicago Press, University of Chicago Press, vol. 26, pages 35-71.
  4. M. Atkinson & John Creedy & David Knox, 1999. "Alternative Retirement Income Arrangements and Lifetime Income Inequality: Lessons From Australia," International Tax and Public Finance, Springer, Springer, vol. 6(1), pages 103-117, February.
  5. Bateman, Hazel & Ablett. John, 2000. "Compulsory Superannuation and Australian Generational Accounts," Economic Analysis and Policy (EAP), Queensland University of Technology (QUT), School of Economics and Finance, Queensland University of Technology (QUT), School of Economics and Finance, vol. 30(1), pages 33-48, March.
  6. Sang-Wook (Stanley) Cho & Renuka Sane, 2011. "Means-Tested Age Pension and Homeownership: Is There a Link?," Discussion Papers, School of Economics, The University of New South Wales 2011-02, School of Economics, The University of New South Wales.
  7. Michael Hurd & Arie Kapteyn, 2003. "Health, Wealth, and the Role of Institutions," Journal of Human Resources, University of Wisconsin Press, vol. 38(2).
  8. Mark Wooden & Simon Freidin & Nicole Watson, 2002. "The Household, Income and Labour Dynamics in Australia (HILDA)Survey: Wave 1," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 35(3), pages 339-348.
  9. Deborah A. Cobb-Clark & Steve Stillman, 2006. "The Retirement Expectations of Middle-Aged Individuals," CEPR Discussion Papers, Centre for Economic Policy Research, Research School of Economics, Australian National University 540, Centre for Economic Policy Research, Research School of Economics, Australian National University.
  10. Bruce Headey & Mark Wooden & Gary Marks, 2004. "The Structure and Distribution of Household Wealth in Australia," Melbourne Institute Working Paper Series, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne wp2004n12, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
  11. Deborah A. Cobb-Clark & Vincent A. Hildebrand, 2006. "The Wealth And Asset Holdings Of U.S.-Born And Foreign-Born Households: Evidence From Sipp Data," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 52(1), pages 17-42, 03.
  12. Queisser, Monika & Whitehouse, Edward, 2005. "Pensions at a glance: public policies across OECD countries," MPRA Paper 10907, University Library of Munich, Germany.
  13. Jonathan Gruber & David Wise, 2001. "An International Perspective on Policies for an Aging Society," NBER Working Papers 8103, National Bureau of Economic Research, Inc.
  14. Garry F. Barrett & Yi-Ping Tseng, 2008. "Retirement Saving in Australia," Canadian Public Policy, University of Toronto Press, vol. 34(s1), pages 177-193, November.
  15. Blau, Francine D & Graham, John W, 1990. "Black-White Differences in Wealth and Asset Composition," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 105(2), pages 321-39, May.
  16. David M. Knox, 1995. "The Age Pension: Means Tested or Universal?," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 28(3), pages 107-110.
  17. Therese Jefferson & Alison Preston, 2005. "Australia'S "Other" Gender Wage Gap: Baby Boomers And Compulsory Superannuation Accounts," Feminist Economics, Taylor & Francis Journals, Taylor & Francis Journals, vol. 11(2), pages 79-101.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Sang-Wook (Stanley) Cho & Renuka Sane, 2014. "Means-tested Age-Pension and Saving," Discussion Papers, School of Economics, The University of New South Wales 2014-03, School of Economics, The University of New South Wales.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:iza:izadps:dp4481. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mark Fallak).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.