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Does the early release of retirement savings prolong labor market participation for workers approaching retirement? Evidence from Australia's “Transition to Retirement Income Streams” program

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  • Carter Andrew Dudley

    (Crawford School of Public Policy, Australian National University College of Asia and the Pacific, JG Crawford Building, 132 Lennox Crossing, Canberra, ACT 2601, Australia)

Abstract

Australia's “Transition to Retirement Income Streams” (TRIS) program aims to prolong labor force participation for older workers (aged 55–65 years) by offering early access to a worker's compulsory retirement savings (superannuation). Using a difference-in-differences design, our results suggest a small labor supply response, which increases after the program's initial years. The size of the effects appears to be consistent with the program adoption profile, which was low initially. For this reason, our estimates should be viewed as a lower bound for the true effects. We find that individuals with higher incomes are more likely to adopt TRIS. At least half of the program participants appear to be using strategies to minimize tax, a behavioral response that seems at odds with the program's intent.

Suggested Citation

  • Carter Andrew Dudley, 2022. "Does the early release of retirement savings prolong labor market participation for workers approaching retirement? Evidence from Australia's “Transition to Retirement Income Streams” program," IZA Journal of Labor Policy, Sciendo & Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 12(1), pages 1-36, January.
    • Handle: RePEc:vrs:izajlp:v:12:y:2022:i:1:p:36:n:5
    DOI: 10.2478/izajolp-2022-0010
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    labor supply; impact evaluation; mature age workers; retirement savings; transition to retirement;
    All these keywords.

    JEL classification:

    • J19 - Labor and Demographic Economics - - Demographic Economics - - - Other
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs

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