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Do Government Benefits for High Income Retirees Encourage Saving?

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  • Peter Siminski

    (University of Wollongong)

Abstract

The Australian government provides benefits to high income older people, which are intended to induce saving for retirement. It has not been established whether this unusual policy is effective. Using an illustrative two-period model, it is shown that these benefits may induce some people to save and work more, but they may have the opposite effect on other, more affluent, people. The magnitude and direction of the net effect on private saving remains an open empirical question. The policy may have increased Commonwealth government expenditure on relatively affluent older people and reduced state government expenditure on people with slightly less resources.

Suggested Citation

  • Peter Siminski, 2009. "Do Government Benefits for High Income Retirees Encourage Saving?," Australian Journal of Labour Economics (AJLE), Bankwest Curtin Economics Centre (BCEC), Curtin Business School, vol. 12(3), pages 247-261.
    • Handle: RePEc:ozl:journl:v:12:y:2009:i:3:p:247-261
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    References listed on IDEAS

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    Cited by:

    1. Todd Morris, 2022. "The unequal burden of retirement reform: Evidence from Australia," Economic Inquiry, Western Economic Association International, vol. 60(2), pages 592-619, April.

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    More about this item

    Keywords

    Intertemporal Consumer Choice; Life Cycle Models and Saving Fiscal Policies and Behaviour of Economic Agents: Household;

    JEL classification:

    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household

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