The multidisciplinary Pension, Retirement and Ageing Seminar Series is co-hosted by CEPAR and the School of Risk & Actuarial Studies, UNSW Business School with the aim of encouraging interaction between academic researchers from a broad range of disciplines as well as from industry and government. Seminars take place fortnightly, usually on a Monday around noon (UTC+10, Australian Eastern Time) and provide an excellent opportunity to network with pensions, ageing and retirement experts from Australia and overseas.
Call for speakers to present their research:
Topics that interest our audience include: issues associated with pensions, retirement and/or ageing from a broad range of disciplines including economics, finance, actuarial studies, law, psychology, public health etc.
Speakers: Academics and research students as well as researchers in industry and government are welcome to submit expressions of interest
Seminar series schedule: During UNSW semesters every second Monday from the end of February to end of May; and then end of August to end of November
Presentation mode: We strongly encourage you to present and participate 'in person'. However, the seminars will be delivered in hybrid-mode and we will support presentation online for international speakers and others unable to travel to UNSW Sydney.
Seminar time: Seminars are usually held from 12-1 pm, followed by 1-1:30 pm for lunch and discussion with on-site participants (Sydney Time). We can adjust these times for the convenience of speakers from different time zones. Lunch boxes will be provided to participants in the seminar room.
Please contact Dr Hanlin Lou if you are interested in presenting, participating or would like to be added to the Pensions, Retirement and Ageing Seminar Series mailing list.
View past Pensions, Retirement and Ageing Seminar Series:
2023 Schedule
Title: Borrower Preferences for Mortgage Attributes: The Roles of Confusion, Importance and Advice
Date: 6 Nov 2023
Time: 12.00-1.00 pm
Location: Room G01 (Goldstein Building) & Teams
Speaker: Susan Thorp
Affiliation: University of Sydney
Abstract: Choice of a home loan is one of the most important and confusing financial decisions households make in their lifetime and many borrowers go to mortgage brokers for help. We study the comparative effectiveness and safety of household interactions with mortgage brokers in Australia. As for other types of financial advice, mortgage broker and borrower incentives may not align. Using data collected in a lab-in-the-field experiment, we find that the attributes that borrowers rate as most confusing, they also rate as least important. We show that brokers educate borrowers, moderating their clients’ confusion about mortgage attributes. However, borrowers who consult brokers place importance on attributes that align with broker incentives. Results from a choice experiment show that broker-advised consumers are willing to pay more for attributes that increase broker fees, such as high-volume and longer-term mortgages.
Title: Early Pension Withdrawal after a Health Shock: An Analysis of the Impact of Cancer on Retirement Savings and Income
Date: 23 October 2023
Time: 12.00-1.00 pm
Location: Room G01 (Goldstein Building) & Teams (please see link below)
Speaker: Maryam Naghsh Nejad
Affiliation: University of Technology Sydney
Abstract: Unexpected health shocks can be extremely disruptive. Cancer is often diagnosed at a random and unexpected time in someone’s life, even for those with a greater likelihood of getting ill due to hereditary and environmental factors. An unexpected illness could cause financial hardship for those in precarious employment situations or those without adequate savings. Early access to retirement savings for those with ill health or disability is allowed in a range of countries, including the United States, Canada, and Australia. We focus on early withdrawals from Australia’s mandatory private retirement saving system, which tend to be rare but can occur for compassionate grounds. Using a dynamic difference-in-difference framework and full population data we find that the likelihood of early withdrawals significantly increases in the year of or the year after chemotherapy. Those most likely to rely on this means of financial support are those who already needed support with day-to-day tasks, males, those with a mortgage, and those in blue-collar occupations. In Australia, people are unable to access disability support payments while cancer treatment is ongoing. This means that there is no government support for cancer patients other than unemployment support payments or the early withdrawal of Superannuation. With an increase in casual employment and short-term contracts, people are more vulnerable to unexpected health shocks and there is a need for government support for those undergoing chemotherapy who have no other means of support available.
Title: Labour Market Sorting and Social Security in Developing Countries
Date: 9 October 2023
Time: 12.00-1.00 pm
Location: Room G01 (Goldstein Building) & Teams (please see link below)
Speaker: Han Gao
Affiliation: University of New South Wales, CEPAR
Abstract: Large informal labor markets determine not only the current taxes and earnings of workers but also future eligibility to Social Security (SS) payments. In this work, we study the case of Brazil where roughly 30 percent of employment is informal. We build an equilibrium life cycle labor search model in which firms post contracts specifying job formality and wages on the job and calibrate the model to match worker transitions across the formal and informal sectors over the life cycle and sorting between firm size, formality, and worker skills in the cross section. We, then, perform various counterfactual experiments to understand how changes to the financing of the pension system may affect firm's contract posting decisions and sorting between workers and firms. We find that policy reforms that weaken the linkage between formality and Social Security contributions lead to an increase in aggregate vacancies and formal vacancy and employment share, which stimulate the fluidity of labor market and benefit low-skilled workers more.
Title: ‘Relabelling’ of Individual Early Retirement Pension in Finland: Application and Behavioural Responses using Finnish Register Data
Date: 25 September 2023
Time: 4.00 pm -5.00 pm AEST
Location: Zoom
Speaker: Ricky Kanabar
Affiliation: University of Bath
Abstract: Using rich Finnish population level registers, we examine the impact of fusing a flexible early retirement pathway with a more stringent pathway, without changing eligibility conditions, so-called ‘relabelling’, on individual application behaviour. Our findings show that among affected cohorts the likelihood of applying for (successfully claiming) disability-related early retirement declined by 1.8 (1.5) percentage points equivalent to a relative drop of approximately 37% (39%) following the reform. Individuals with below tertiary level education and stronger lifetime labour market attachment exhibit a stronger behavioural response to the reform. We find tentative evidence of programme substitution to early retirement pathways designed to keep individuals in the labour market albeit on a part time basis. Our findings suggest that social norms and lack of awareness associated with early retirement pathways can strongly influence application behaviour even when eligibility conditions remain unchanged, offering policymakers novel ways to extend working lives.
Recording
Title: Occupational Retirement and Pension Reform: The Roles of Physical and Cognitive Health
Date: 11 September 2023
Time: 10.30-11.30 am AEST
Location: Zoom
Speaker: Jiayi Wen
Affiliation: Xiamen University
Abstract: Despite the increasing cognitive demands of jobs, our understanding about the role of health in retirement has centered on its physical dimensions. This paper documents a novel fact that retirement corresponds with physical and cognitive decline distinctly across jobs. Then I estimate a dynamic programming model of retirement that incorporates multiple health dimensions, allowing differential effects on labor supply across occupations. Results show that the effect of cognitive health surges exponentially after age 65, and it explains a notable share of the employment decline in cognitively demanding occupations. Under pension reforms, poor physical health mainly impedes manual workers from delaying retirement, whereas poor cognitive health shows no impact for them but dampens the response of clerical and professional workers, which unevenly exacerbates the welfare losses across occupations. The results suggest that ignoring the cognitive dimension will generate biased assessments on retirement policies due to the shifting job requirements.
Title: On the Non-Robustness of Income Polarization Measures to Housing Cycles
Date: 28 August 2023
Time: 12.00-1.00 pm AEST
Location: UNSW Business School Rm 115 & Teams
Speaker: Sergey Alexeev
Affiliation: University of Sydney
Abstract: A cross-country comparison of the middle class as measured by income polarization indices is commonplace in welfare economics. Using the 2001-2007 housing cycle and data for Australia, the United States, Germany, and Switzerland (and an array of methods, including triple-difference design), I show that polarization indices based on disposable income are unreliable. The cycle changes the relative importance of non-monetary income from housing (imputed rent), particularly for middle-income households. Therefore, to ensure that convenient income measures do not misrepresent the size of the middle class, researchers should verify the absence of swings in housing prices during their study period.
Recording
Title: Revisiting Retirement and Social Security Claiming Decisions
Date: 22 May 2023
Time: 12.00-1.00 pm AEST
Location: UNSW Business School 119 & Teams (please contact Dr Gaoyun (Sophie) Yan)
Speaker: Kathleen McKiernan
Affiliation: Vanderbilt University
Abstract: The Social Security (SS) program structure presents a trade-off between the number of years the benefits are received and the size of those benefits. SS claiming behavior, especially of those Americans with high life expectancy, suggests that older workers place little value on the longer-term annuity of these benefits, preferring instead to start receiving benefits as early as they can, even though this option reduces the overall payout. We provide answers to this puzzle within the scope of an augmented, albeit standard, forward-looking life-cycle framework, in contrast to prior literature relying on behavioral channels. Toward this goal, we document claiming frictions that may prevent households from delaying benefit claims. We build a structural life-cycle model of consumption, savings, retirement and Social Security claiming with rich heterogeneity in demographics and family structure, to quantify the role and potential costs of these frictions. Counterfactual experiments show that the claiming frictions - SS marital rules, budgetary shocks, misbeliefs, and bequest motives - can explain 78 percent of the overall early claiming rates in the model. Policy experiments highlight the role of these frictions, in limiting the ability of households to augment their claiming ages, in response to changes in the normal retirement age. This is found to be especially true for singles who lack insurance through their spouses. Aggregate lifetime benefit payouts after such a policy change are found to be up to 40 percent higher if the impact of claiming frictions on behavior is not taken into account.
Recording
Title: Energy Poverty and Retirement Income Sources in Australia
Date: 8 May 2023
Time: 12.00-1.00 pm for the seminar & 1.00-1.30 pm for an informal chat with the speaker (AEST)
Speaker: Jane Fry
Affiliation: Melbourne School of Population and Global Health, University of Melbourne
Abstract: In many countries population ageing will increase the share of retirees in the coming years. Energy poverty is a particular problem for older people (due to fixed and often relatively low incomes and the need for additional energy due to underlying health conditions). This can have cost implications for the healthcare sector if the health of older people deteriorates due to energy poverty. The burden of population ageing and the increasing dependency ratio has meant the government is moving towards individuals funding their own retirement via compulsory superannuation schemes. Our study is based in Australia where there is a difference in retirement income sources between publicly funded Age Pensioners, Part-pensioners and Self-Funded Retirees leading to differences in energy poverty beyond income effects. Using 15 annual waves of the HILDA survey from 2005 to 2019, this study investigates drivers of energy poverty inequalities among retirees. Our main finding is that Age Pensioners are the worst off and Self-Funded Retirees the best off on a Low Income–High Cost measure of energy poverty and on a subjective indicator of inability to heat the home. Therefore, not all retirees have the same probability of experiencing energy poverty. However, wealth, assets, social connections and good health are significant mediators that soften the impact of subjective concerns regarding energy bills for retirees. Government-funded pensions are a safety net and need to be sufficient in times of energy price inflation. Moreover, we need to reduce the gap between state-funded pensions and self-funding arrangements to ensure equity in elderly populations.
Recording
Date: 17 April 2023
Time: 12.00-1.00 pm AEST
Speaker: Hanlin Lou
Affiliation: CEPAR, UNSW Sydney
Abstract: We empirically examine whether information disclosures after making high-cost transactions induce customers to improve their financial decision-making. We examine a randomized control trial by a large commercial bank that involved notifications sent to credit card customers in a treatment group after every high-cost transaction. Customers were informed that the transaction incurs an additional fee and a higher interest rate effective immediately. We find that this ex-post nudge significantly reduces the number of subsequent high-cost transactions and increases the likelihood of making a repayment on the same day. This evidence is consistent with the ex-post information notification increasing customers’ awareness of the fee and higher interest rate which subsequently resulted in them rationally adjusting their credit card usage to save money. More generally, this evidence supports a novel method to help people make better decisions by nudging them immediately after a costly decision was made.
Title: The Impact of Health Insurance on Health Behaviours among Older People: Evidence from Japan
Date: 27 March 2023
Time: 12.00-1.00 pm for the seminar & 1.00-1.30 pm for an informal chat with the speaker (AEDT, GMT+11)
Speaker: Chun Yee (Jenny) Wong
Affiliation: International University Japan
Abstract: This paper estimates the impacts of the change in coinsurance of health insurance on the health behaviours for older people. In 2014, the Japanese government increased the coinsurance of medical care among citizens aged 70-74. Using data from the Comprehensive Survey of Living Conditions in Japan between 2013 and 2016, we deployed the difference-in-differences method to examine the effects of the change in coinsurance on positive and negative health behaviours of older people. We find that a rise in coinsurance increases the positive health behaviors including having balanced diet and doing exercise. However, there is no evidence that risky health behaviors, such as smoking and drinking, decreased as a result of the decline in health insurance coverage.
Recording
Title: Aggregate Social Factors, Genetic Predispositions, and Lifestyle with Risk of Dementia: A Long-term Cohort Study
Date: 13 March 2023
Time: 12.00-1.00pm AEDT
Location: Goldstein G09 on the UNSW Kensington Campus and Zoom (for the Zoom link, please contact Dr Yan)
Speaker: Shu Chen
Affiliation: CEPAR, UNSW Sydney
Abstract: Dementia disproportionately affects individuals with lower socioeconomic status. Considering social factors matter in the aggregate, it is crucial to understand how they collectively contribute to the risk of developing dementia and how they work with genetic and lifestyle risk factors to determine dementia. Our study uses longitudinal cohort data from the Health and Retirement Study (HRS) in the US to 1) develop a polysocial risk score (PsRS) for dementia in the American population, 2)assess the association between aggregated social determinants and the risk of dementia; 3) and explore the moderating role of genetic predisposition and lifestyle. We found that PsRS can strongly predict the onset of dementia despite genetic predisposition and lifestyle risk factors. Those in the highest tertile of PsRS and with heavy drinking had a significantly higher likelihood of developing dementia. The policy implications of the results will also be discussed.
Title: Do Reverse Mortgage Borrowers Use Credit Ruthlessly?
Date: 27 February 2023
Time: 12.00-1.00 pm AEDT
Location: Goldstein G09 and Zoom
Speaker: Thomas Davidoff
Affiliation: University of British Columbia
Abstract: Home Equity Conversion Mortgages ("HECMs") offer older US homeowners liquidity and implicit home price insurance. If borrowers' homes are worth less than their loan balance when they move or die, their liability is limited to collateral value. The Federal Housing Administration ("FHA") absorbs the lender's loss. FHA aims to break even on this insurance, but pricing does not reflect geographic or cyclical risk. HECMs were disproportionately originated near the recent home price cycle peak in markets with large subsequent busts. Many borrowers thus have credit lines with limits greater than their homes are worth, and FHA has lost money on HECM. Did borrowers adversely select into HECM intending to exploit mispriced insurance? This appears unlikely: borrowers whose loans terminated with credit limits greater than their homes are worth have been no likelier to exhaust credit than similar borrowers whose loans terminated with credit limits below collateral value.
Recording
To discuss your access requirements, please call +61 2 9385 7359 or email cepar@unsw.edu.au.
The CEPAR team is happy to receive phone calls via the National Relay Service. TTY users, phone 133 677, then ask for 02 9385 7359. Speak and Listen users, phone 1300 555 727 then ask for 02 9385 7359. Internet relay users, visit relayservice.gov.au, then ask for 02 9385 7359.