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The effect of New Zealand Superannuation eligibility age on the labour force participation of older people

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Abstract

New Zealand experienced a sharp rise in labour force participation rates among older people over the period 1991/2001. This stands in contrast to the experience of most other OECD countries where such participation rates have been in steady decline. The predominant reason for this turnaround was that the age of eligibility for New Zealand Superannuation, the universal public pension, was raised from 60 to 65 over a nine-year period. Combining an earlier reduction in eligibility age with this later policy reversal, this paper estimates the effect of public pension eligibility on the labour force participation of different age groups. The paper discusses why particular features of New Zealand?s pension system mean that the strength and rapidity of the response to a rise in eligibility age might not be repeatable in other settings.

Suggested Citation

  • Roger Hurnard, 2005. "The effect of New Zealand Superannuation eligibility age on the labour force participation of older people," Treasury Working Paper Series 05/09, New Zealand Treasury.
    • Handle: RePEc:nzt:nztwps:05/09
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    File URL: https://treasury.govt.nz/sites/default/files/2007-09/twp05-09.pdf
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    References listed on IDEAS

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    1. Jonathan Gruber & David Wise, 2005. "Social Security Programs and Retirement around the World: Fiscal Implications, Introduction and Summary," NBER Working Papers 11290, National Bureau of Economic Research, Inc.
    2. Queisser, Monika & Whitehouse, Edward, 2005. "Pensions at a glance: public policies across OECD countries," MPRA Paper 10907, University Library of Munich, Germany.
    3. Jonathan Gruber & David A. Wise, 2004. "Social Security Programs and Retirement around the World: Micro-Estimation," NBER Books, National Bureau of Economic Research, Inc, number grub04-1.
    4. Robert Holzmann & Richard Hinz, 2005. "Old Age Income Support in the 21st century: An International Perspective on Pension Systems and Reform," World Bank Publications - Books, The World Bank Group, number 7336.
    5. Jonathan Gruber & David A. Wise, 1999. "Social Security and Retirement around the World," NBER Books, National Bureau of Economic Research, Inc, number grub99-1.
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    Cited by:

    1. Michael P. Cameron, 2014. "Labour Force Participation among Older New Zealanders, 1991-2013," Working Papers in Economics 14/06, University of Waikato.
    2. Littlewood, Michael, 2014. "Ageing populations, retirement incomes and public policy: what really matters," MPRA Paper 56232, University Library of Munich, Germany.
    3. Martin Hering & Thomas R. Klassen, 2010. "Strengthening Fairness and Funding in the Canada Pension Plan: Is Raising the Retirement Age an Option?," Social and Economic Dimensions of an Aging Population Research Papers 263, McMaster University.
    4. Michael Callaghan & Jamie Culling & Finn Robinson, 2018. "Ageing is a drag: Projecting labour force participation in New Zealand," Reserve Bank of New Zealand Analytical Notes series AN2018/10, Reserve Bank of New Zealand.
    5. Talosaga Talosaga & Mark Vink, 2014. "The Effect of Public Pension Eligibility Age on Household Saving: Evidence from a New Zealand Natural Experiment," Treasury Working Paper Series 14/21, New Zealand Treasury.
    6. Jamie Culling & Hayden Skilling, 2018. "How does New Zealand stack up? A comparison of labour supply across the OECD," Reserve Bank of New Zealand Bulletin, Reserve Bank of New Zealand, vol. 81, pages 1-19, April.
    7. Emma Gorman & Grant M Scobie & Andy Towers, 2012. "Health and Retirement of Older New Zealanders," Treasury Working Paper Series 12/02, New Zealand Treasury.
    8. Dean Hyslop & Amy Rice & Hayden Skilling, 2019. "Understanding labour market developments in New Zealand, 1986-2017," Reserve Bank of New Zealand Discussion Paper Series DP2019/02, Reserve Bank of New Zealand.
    9. James Enright & Grant M Scobie, 2010. "Healthy, Wealthy and Working: Retirement Decisions of Older New Zealanders," Treasury Working Paper Series 10/02, New Zealand Treasury.

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    More about this item

    Keywords

    public pensions; labour force participation; retirement; New Zealand;
    All these keywords.

    JEL classification:

    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies

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