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Home ownership as a (crumbling) fourth pillar of social insurance in Australia


  • Bruce Bradbury
  • Judith Yates


This paper examines the potential that asset based welfare has to protect households from poverty after retirement by focusing specifically on the role of home ownership in maintaining average living standards and preventing poverty among older Australians. Incomes and housing costs are compared between Australia and six other nations (Canada, UK, USA, Italy, Finland and Sweden) and the likely future trends in Australia examined. Though asset-based welfare has the potential to ease the fiscal constraints faced by the state, it may well lead to poorer social insurance outcomes for households with limited saving capacity over their lifetime. Access to home ownership tends to be more limited than access to the labour market and fluctuations in asset prices can lead to arbitrary shifting of wealth between generations. Social insurance programs can be more readily designed with explicit distributional objectives. By international standards, the older population in Australia has a low average income and a high income poverty rate. However, unlike most other rich nations, more than 80 per cent of people over retirement age in Australia own their own home. After taking account of their lower housing costs, their average living standard and after housing poverty rate is similar to that in the other countries. Nonetheless, the Australian model means that those who miss out on home ownership are multiply disadvantaged and projections suggest that this group will grow in size in the coming decades.

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  • Bruce Bradbury & Judith Yates, 2009. "Home ownership as a (crumbling) fourth pillar of social insurance in Australia," LWS Working papers 8, LIS Cross-National Data Center in Luxembourg.
  • Handle: RePEc:lis:lwswps:8

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    References listed on IDEAS

    1. Kostas Tsatsaronis & Haibin Zhu, 2004. "What drives housing price dynamics: cross-country evidence," BIS Quarterly Review, Bank for International Settlements, March.
    2. Richard K. Green & Stephen Malpezzi & Stephen K. Mayo, 2005. "Metropolitan-Specific Estimates of the Price Elasticity of Supply of Housing, and Their Sources," American Economic Review, American Economic Association, vol. 95(2), pages 334-339, May.
    3. Chong Ju Choi & Carla C. J. M. Millar & Caroline Y. L. Wong, 2005. "Knowledge and the State," Palgrave Macmillan Books, in: Knowledge Entanglements, chapter 0, pages 19-38, Palgrave Macmillan.
    4. Judith Yates, 1994. "Imputed Rent And Income Distribution," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 40(1), pages 43-66, March.
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    Cited by:

    1. Manuela Deidda, 2015. "Economic Hardship, Housing Cost Burden and Tenure Status: Evidence from EU-SILC," Journal of Family and Economic Issues, Springer, vol. 36(4), pages 531-556, December.
    2. Andrea Brandolini & Silvia Magri & Timothy M. Smeeding, 2010. "Asset-based measurement of poverty," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 29(2), pages 267-284.
    3. eccleston, richard & Verdouw, Julia & Flanagan, Kathleen & Warren, Neil & Duncan, Alan & Ong, Rachel & Whelan, Stephen & Atalay, Kadir & Hayward, Richard Donald, 2018. "Pathways to housing tax reform," SocArXiv 8xrbe, Center for Open Science.
    4. Marchand, J. & Smeeding, T., 2016. "Poverty and Aging," Handbook of the Economics of Population Aging, in: Piggott, John & Woodland, Alan (ed.), Handbook of the Economics of Population Aging, edition 1, volume 1, chapter 0, pages 905-950, Elsevier.
      • Marchand, Joseph & Smeeding, Timothy, 2016. "Poverty and Aging," Working Papers 2016-11, University of Alberta, Department of Economics, revised 20 Nov 2016.
    5. Chyi Lin Lee, 2017. "An examination of the risk-return relation in the Australian housing market," International Journal of Housing Markets and Analysis, Emerald Group Publishing Limited, vol. 10(3), pages 431-449, June.

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