Retirement in Australia: A Closer Look at the Financial Incentives |
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| Authors: | Diana Warren Umut Oguzoglu |
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| Affiliation: | 1. Melbourne Institute of Applied Economic and Social Research, The University of Melbourne;2. Department of Economics, University of Manitoba and IZA, Bonn;3. This article uses the confidentialised unit record file (release 5.1) of the Household, Income and Labour Dynamics in Australia (HILDA) Survey. The HILDA Survey project was initiated and is funded by the Australian Department of Family and Community Services (FaCS) and is managed by the Melbourne Institute of Applied Economic and Social Research. The findings and views reported in this article, however, are those of the authors and should not be attributed to either FaCS or the Melbourne Institute. The authors also thank Bruce Headey, Jeff Borland and John Creedy for valuable comments and acknowledge the financial support of the Australian Research Council, which partially funded this research through a Discovery Project grant (no. DP0663362). |
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| Abstract: | In Australia, labour force participation among older people has been declining. Previous research has found that in many OECD countries, the retirement income system actually provides a financial incentive for older workers to retire early. In this article, we model the retirement behaviour of Australian men and women aged between 55 and 70 years, where individuals retire in the period that the present value of their lifetime retirement income is maximised. Our findings suggest that the Australian retirement system does provide an incentive to retire early. However, men are much more likely than women to respond to these financial incentives. |
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