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Impacts from Delaying Access to Retirement Benefits on Welfare Receipt and Expenditure: Evidence from a Natural Experiment

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  • Oguzoglu, Umut

    (University of Manitoba)

  • Polidano, Cain

    (Melbourne Institute of Applied Economic and Social Research)

  • Vu, Ha

    (Deakin University)

Abstract

Governments are responding to fiscal pressures associated with aging populations by increasing the eligibility age for publicly-funded retirement benefits. However, recent studies show large resulting increases in the receipt of alternative payments, which raises concern that welfare savings are offset by increased inflows into alternative payments. Using administrative data to examine the impacts of female eligibility age increases in Australia, we find little evidence of this. Instead, most of the increase in receipt is because the delay mechanically extends the receipt time of people already on alternative payments. The implication is that fiscal savings are not being jeopardized by opportunistic behaviour.

Suggested Citation

  • Oguzoglu, Umut & Polidano, Cain & Vu, Ha, 2016. "Impacts from Delaying Access to Retirement Benefits on Welfare Receipt and Expenditure: Evidence from a Natural Experiment," IZA Discussion Papers 10014, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp10014
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    Cited by:

    1. Todd Morris, 2022. "Re-examining female labor supply responses to the 1994 Australian pension reform," Review of Economics of the Household, Springer, vol. 20(2), pages 419-445, June.
    2. Manuel Serrano‐Alarcón & Chiara Ardito & Roberto Leombruni & Alexander Kentikelenis & Angelo d’Errico & Anna Odone & Giuseppe Costa & David Stuckler & IWGRH, 2023. "Health and labor market effects of an unanticipated rise in retirement age. Evidence from the 2012 Italian pension reform," Health Economics, John Wiley & Sons, Ltd., vol. 32(12), pages 2745-2767, December.
    3. Zwick, Thomas & Bruns, Mona & Geyer, Johannes & Lorenz, Svenja, 2022. "Early retirement of employees in demanding jobs: Evidence from a German pension reform," The Journal of the Economics of Ageing, Elsevier, vol. 22(C).
    4. 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.
    5. Riphahn, Regina T. & Schrader, Rebecca, 2023. "Reforms of an early retirement pathway in Germany and their labor market effects," Journal of Pension Economics and Finance, Cambridge University Press, vol. 22(3), pages 304-330, July.
    6. Geyer, Johannes & Haan, Peter & Hammerschmid, Anna & Peters, Michael, 2020. "Labor Market and Distributional Effects of an Increase in the Retirement Age," Labour Economics, Elsevier, vol. 65(C).
    7. Welteke, Clara & Geyer, Johannes & Haan, Peter, 2016. "Early retirement eligibility and employment behavior: evidence from a cohort based pension reform," VfS Annual Conference 2016 (Augsburg): Demographic Change 145783, Verein für Socialpolitik / German Economic Association.
    8. Andrew E Clark & Rong Zhu, 2024. "Taking Back Control? Quasi-Experimental Evidence on the Impact of Retirement on Locus of Control," The Economic Journal, Royal Economic Society, vol. 134(660), pages 1465-1493.
    9. Mohamed Ebeid & Umut Oguzoglu, 2023. "Short‐term effect of retirement on health: Evidence from nonparametric fuzzy regression discontinuity design," Health Economics, John Wiley & Sons, Ltd., vol. 32(6), pages 1323-1343, June.
    10. Elisa Birch & Alison Preston, 2021. "Women, COVID-19 and Superannuation," Australian Journal of Labour Economics (AJLE), Bankwest Curtin Economics Centre (BCEC), Curtin Business School, vol. 24(2), pages 175-198.
    11. Nguyen, Ha Trong & Mitrou, Francis & Zubrick, Stephen R., 2024. "Retirement, housing mobility, downsizing and neighbourhood quality - A causal investigation," Journal of Housing Economics, Elsevier, vol. 63(C).
    12. Nguyen, Ha Trong & Mitrou, Francis & Taylor, Catherine L. & Zubrick, Stephen R., 2020. "Does retirement lead to life satisfaction? Causal evidence from fixed effect instrumental variable models," GLO Discussion Paper Series 536, Global Labor Organization (GLO).
    13. Ardito Chiara, 2021. "The unequal impact of raising the retirement age: Employment response and program substitution," IZA Journal of Labor Economics, Sciendo & Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 10(1), pages 1-37, January.
    14. Johannes Geyer & Clara Welteke, 2017. "Closing Routes to Retirement: How Do People Respond?," Discussion Papers of DIW Berlin 1653, DIW Berlin, German Institute for Economic Research.
    15. Zhu, Rong & Onur, Ilke, 2023. "Does retirement (really) increase informal caregiving? Quasi-experimental evidence from Australia," Journal of Health Economics, Elsevier, vol. 87(C).
    16. Bocong Yuan & Jiachun Fang & Jiannan Li & Fei Peng, 2022. "Chronic patients as retirement-aged workers: the impact of employment-based health insurance and chronic conditions on health-related working capacity and late-life career participation," European Journal of Ageing, Springer, vol. 19(4), pages 1351-1362, December.

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    More about this item

    Keywords

    retirement; welfare substitution; aging population;
    All these keywords.

    JEL classification:

    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General

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