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Pensions, Retirement and Ageing Seminar Series 2022


Image: UNSW Business School building

CEPAR and the School of Risk & Actuarial Studies, UNSW Business School are seeking speakers to present their research on issues associated with pensions, retirement and/or ageing in the 2022 seminar series. Participation from academics and research students from all universities as well as from researchers in industry and government are welcome. Interested speakers should contact CEPAR Research Fellow Dr Gaoyun (Sophie) Yan.

This multidisciplinary seminar series is hosted 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 at noon (UTC+10, Australian Eastern Daylight Saving Time)* and provide an excellent opportunity to network with pensions, ageing and retirement experts from Australia and overseas.

Please contact Gaoyun (Sophie) Yan 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:

2022 Schedule

28 February Variable Uninsured Life (Value) Annuities: Theory, Practice and Country Cases - William Price and Evan Inglis (D3P Global)

14 March Gender Effect in Long-term Care: Evidence from China - Yuanyuan Deng (CEPAR, UNSW Sydney)

28 MarchPrudential Regulation and Climate Change - Scott Donald (UNSW Sydney)

11 April Better Educated Children, Better Internet-Connected Elderly Parents - Dandan Yu (CEPAR, UNSW Sydney)

9 MayEquity-efficiency Trade-offs from (Removing) Superannuation Tax Concessions in a Stochastic OLG Economy - George Kudrna (CEPAR, UNSW Sydney)

23 May - Understanding the Determining Factors of Aged Care Accommodation Payment Choices in Australia - Yuanyuan Gu (Macquarie University Centre for the Health Economy)

29 August, 12-1pm AEST -  Funding Retirement with Public Reverse Mortgages: An Evaluation of Australia’s Home Equity Access Scheme - Katja Hanewald (UNSW Sydney)

12 September, 4-5pm AEST - The Effect of Taxation on Optimal Consumption and Portfolio Decisions Over the Life-cycle - Jun-Hee An (Tilburg University)

26 September, 12-1pm AEST - Social Security and Female Labor Supply in China - Han Gao (CEPAR, UNSW Sydney)

27 October, 12-1.30pm AEDT - Insurance Coverage for Chronic Diseases and Health Care Utilization among Low-income People: Evidence from China -  Zhen Wang (Fudan University)

7 November, 12:00-1:00 pm AEDT - The Long-Run Effects of Federal Student Loans on Fertility and Social Mobility - Yue Hua (CEPAR, UNSW Sydney)

Variable Uninsured Life (Value) Annuities: Theory, Practice and Country Cases

Date: 28 February 2022

Time: 11.00 am - 12.00 pm for the seminar & 12.00 pm - 12.30 pm for an informal chat with the speaker (Sydney time, GMT+11)

Location: Zoom (please see link below)

Speaker: William Price and Evan Inglis

Affiliation: D3P Global

Abstract: Many national retirement and social security systems lack efficient payout systems that provide true retirement security.  Lump-sum payouts force pensioners to manage for themselves.  Insured solutions don’t exist everywhere and may be expensive for the income provided where they do.  A VALUE (Variable Uninsured Life Annuities) pool pays income to and shares all risk amongst a group of pensioners.  The level of income will vary with investment returns and mortality experience.  However, changes in income are limited by spreading unexpected investment or mortality results over the future lifetime of all the pool members. Lifetime income solutions like VALUE and other annuities provide more income during retirement than systematic withdrawals.  Systematic withdrawals leave money behind in bequests, while annuities pay it to retirees that are still living.  VALUE tends to provide more income than insured annuities due to lower costs and more growth-oriented investments.  Members of a VALUE pool take on systematic longevity risk which is borne by the insurer with commercial annuities. The research published by the Society of Actuaries takes a practical bent and provides working models for the actuarial aspects of a VALUE pool as well as modeling of outcomes and extensive advice on design, implementation, and regulatory issues.

Gender Effect in Long-term Care: Evidence from China

Date: 14 March 2022

Time: 11 am – 12:30 pm (AEDT)

Speaker: Yuanyuan Deng

Affiliation: CEPAR, UNSW Sydney

Abstract: Population aging causes growing needs for long-term care, especially for older women who live longer. At the same time, most informal caregivers are female. Given the observed benefits of gender matches in health care and education settings, this paper investigates the impact of the same gender effect on health and long-term care outcomes at older ages. Using data from the 2018 wave of the Chinese Longitudinal Healthy Longevity Survey, we find that disabled older adults who receive informal care from caregivers of the same gender are more likely to receive adequate long-term care and enjoy better self-reported health compared to those who receive informal care from caregivers of the opposite gender. Our results suggest that the health and long-term care outcomes of older male Chinese could be improved if they received more informal care from male caregivers. Long-term care policies should encourage sons to care for fathers and provide advice and support for male caregivers.

Prudential Regulation and Climate Change

Date: 28 March 2022

Time: 12.00 pm - 1.30 pm (AEDT)

Speaker: Scott Donald

Affiliation: UNSW Sydney

Abstract: Prudential regulators seek to ensure that the institutions (banks, insurers, pension schemes) making financial promises to their customers are capable of meeting those promises. Over time that has caused them to take an increasingly holistic view of the risks faced by those entities, moving from focusing primarily on balance sheet and cashflow risks towards a suite of financial, operational and commercial risks.  Attention has moved progressively also to the governance and managerial processes within the entities that are intended to engage with the risks.  It should be no surprise, therefore, that risks caused by climate change have emerged over the past decade as requiring concerted attention both from the institutions and the prudential regulators who supervise them.  The challenge for both institutions and prudential regulators is to design frameworks and processes that capture and assess the risks from climate change in a way that is tractable, rigorous and capable of integration into their existing frameworks and processes.

This paper maps how the practice of prudential regulation has evolved in recent years across a number of major jurisdictions (Europe, UK, Australia, NZ, Singapore and South Africa) to accommodate the risks from climate change.  This has value in its own right.  Climate change is perhaps the most urgent existential risks currently facing most modern economies.  However, the analysis also provides a compelling case study of how prudential regulation itself needs to be conceived, and in particular its need to be ready continually to address nascent types of risk the dimensions and severity of which emerge only over time.

Title: Better Educated Children, Better Internet-Connected Elderly Parents
Date: 11 April 2022
Time: 12.00-1.00 pm for the seminar & 1.00-1.30 pm for an informal chat with the speaker (Sydney time, GMT+11)
Location: QUAD G026 on the UNSW Kensington Campus AND Zoom 
Speaker: Dandan Yu
Affiliation: CEPAR, UNSW Sydney

Abstract: This paper examines how adult children's education affects elderly parents' Internet use. We exploit the arguably exogenous variation in children's years of schooling induced by the enforcement of the compulsory education law around 1986 in China. Using a sample of rural older adults from the China Family Panel Studies, we find that adult children's education increases parents' Internet use via mobile devices. Parents with better-educated children are more likely to use the Internet for study, social, and entertainment activities. We find stronger effects of daughters' education, and fathers or parents with relatively more education reap more benefits from their children's education. We also provide suggestive evidence that more financial support and better cognitive health might help explain the effects of children's education.

Title: Equity-efficiency trade-offs from (removing) superannuation tax concessions in a stochastic OLG economy

Date: 9 May 2022

Time: 12.00-1.00 pm (Sydney Time, GMT+10)

Location: QUAD G026 on the UNSW Kensington Campus AND Zoom 

Speaker: George Kudrna

Affiliation: CEPAR, UNSW

Abstract: Tax subsidies to private pensions are common in developed countries. In Australia, the private pension system (known as superannuation) is funded predominantly by mandatory contributions made to private retirement accounts, which are illiquid until older age. Both mandatory contributions and fund investment earnings are taxed at concessional (lower) tax rates, compared to progressive income tax rates, with superannuation drawdowns at older age being generally tax-free. It is now common practice for the government to calculate the cost of superannuation tax concessions, using micro-simulation models (Treasury 2020). Instead, in this paper, I examine superannuation tax concessions, using a stochastic overlapping generations (OLG) model, which accounts for household lifecycle economic behaviour, uncertain labour income and general equilibrium effects. The benchmark model is calibrated to Australia, incorporating a detailed representation of the Australian tax and pension policy, including its existing mandatory superannuation system with subsidised superannuation taxation. The model is then applied to simulate the long run effects of removing superannuation tax concessions, with both superannuation contributions and fund investment earnings included in the income tax base under this no-concessions counterfactual. The key finding is that there are significant equity-efficiency trade-offs from removing superannuation tax concessions, which depend on the government budget-equilibrating policy instrument used. More specifically, the no-concessions counterfactual with the consumption tax adjustment (cut) improves equity (e.g., increasing welfare of low-skill households relative to high-skill households) but worsens economic efficiency (e.g., reducing average welfare, labour supply and output per capita). In contrast, the no-concessions counterfactual with the income tax adjustment (cut) improves economic efficiency but worsens equity in the long run. These trade-offs are shown to become more pronounced in the (future) economy with increased mandatory superannuation contributions and population ageing. 

Title: Understanding the determining factors of aged care accommodation payment choices in Australia

Date: 23 May 2022 

Time: 12.00 - 1.00 pm (Sydney/East Coast Australia time zone)

Speaker: Yuanyuan Gu

Affiliation: Macquarie University Centre for the Health Economy

Abstract: Choosing a payment type when entering residential aged care in Australia is a complex financial decision. The payment type chosen can impact an aged care resident’s consumption and wealth, and the bequest left to family. It can also impact a provider’s financial sustainability, and its ability to fund care services and capital expenditure. This study aims to investigate how these decisions are made by undertaking both theoretical predictions and empirical analyses. A data set linking two large administrative datasets from the Department of Health as well as data on housing prices from SIRCA is generated, containing rich information regarding the payment choice and potential predictors from 57,508 non-supported residents between 1 July 2016 to 30 June 2019. Novel econometric models are adopted to reflect the decision process and extensive interactions are considered to explore choice heterogeneity. We find payment type chosen is largely driven by a resident’s asset amount on entry and the accommodation price they face. It is also driven by the maximum permissible interest rate (MPIR) and housing price movement. However, we have not found strong evidence supporting a previous assumption that residents consider this an investment decision. Provider characteristics are strongly associated with the payment decision, which may suggest a potential principal-agent problem. We discuss policy implications and potential changes to improve payment decisions.

Title: Funding Retirement with Public Reverse Mortgages: An Evaluation of Australia’s Home Equity Access Scheme

Date: 29 August 2022

Time: 12.00-1.00pm

Speaker: Katja Hanewald

Affiliation: UNSW Sydney

Abstract: We evaluate the Home Equity Access Scheme (HEAS), an Australian government-offered reverse mortgage designed to help supplement retirement income. The HEAS allows older homeowners to continue to age in place while receiving loans with their home equity as security. We construct a multi-period simulation model with financial uncertainty and health and longevity risks (including movement to aged care facilities), and use this model to consider welfare gains from HEAS use across various household structures and wealth levels. We consider different methods of utilising the HEAS both to boost retirement income and to cover unexpected costs. We also perform policy experiments that consider improvements to HEAS design, aimed at increasing welfare gains. Our results show that a government-offered reverse mortgage scheme, in which loan payments are linked to public pensions, is a welfare-enhancing method of supplementing retirement incomes. We find that, of the studied strategies, choosing to receive the maximum payment is the most welfare-enhancing method utilising the HEAS for most households. The results of different policy experiments show that increasing the maximum permissible payment from the HEAS does not benefit most households, but that reductions in the interest rate do.

Title: The Effect of Taxation on Optimal Consumption and Portfolio Decisions Over the Life-cycle

Date: 12 September 2022

Time: 4.00-5.00 pm (AEST, GMT+11)

Speaker: Jun-Hee An

Affiliation: Tilburg University

Abstract: This paper investigates how taxes affect the optimal accumulation and decumulation decisions over the life-cycle. We compare optimal consumption and investment decisions under the tax regimes that are dominant in the United States, Australia, Netherlands, and Korea. We determine optimal consumption and investment decisions for four strategies: accumulating pension wealth in a taxable free wealth account or in a tax-favored pension account, combined with decumulating accrued wealth at retirement date either with an optimal variable annuity or without longevity insurance. By evaluating welfare gains of using the tax-favored pension account instead of the taxable free wealth account, we also show how taxes affect the welfare gains from annuitization over non-annuitization. Our results indicate substantial differences in welfare effects in the presence/absence of the taxation rules over the life-cycle, suggesting that ignoring taxes as in the academic literature significantly distorts welfare implications.

Title: Social Security and Female Labor Supply in China

Date: 26 September 2022

Time: 12.00-1.00pm AEST

Speaker: Han Gao

Affiliation: CEPAR, UNSW Sydney 

Abstract: This paper studies how a potential policy change that raises women’s social security eligibility age from 50 to 60 would affect women’s employment, human capital, and earnings in China. I develop a dynamic model of female labor supply, featuring voluntary retirement; occupational choice; human capital accumulation contingent on occupation, age, and employment status; and child care using time inputs from parents, grandparents, and formal child care from the market. I estimate the model parameters by matching moments on employment, wages, and the time allocation of child care from micro data in China. The policy counterfactual raising women's social security eligibility age yields two main findings. First, the policy change leads to only a moderate increase in aggregate labor supply because it affects the employment of old and young women in opposite directions. The reduction in social security insurance encourages women above the age of 50 to supply more labor. Yet low-skilled young women with children reduce their labor supply in response to the children's grandmothers working more and providing less child care. Second, since human capital accumulation is faster on the earlier career path rather than later, the reduction in early career employment leads to persistent losses in human capital and earnings for low-skilled women.

Title: Insurance coverage for chronic diseases and health care utilization among low-income people: Evidence from China

Date: 27 October 2022 (Thursday)

Time: 12.00-1.00 pm for the seminar & 1.00-1.30 pm for an informal chat with the speaker (Sydney time, GMT+11)

Speaker: Zhen Wang

Affiliation: Fudan University 

Abstract: Although the cost-sharing policy is widely used in health insurance to limit moral hazards and reduce health expenditure, it could lead to worse health and downstream health costs, especially for low-income people. Low-income people are more likely to delay care due to cost. In this paper, we focus on low-income people from underdeveloped regions of China and exploit increased insurance payments for Coronary Artery Disease (CAD) care in the outpatient setting to study these effects. Using the difference-in-differences strategy, we consistently find that reducing cost sharing for CAD care increases outpatient and inpatient care utilization, especially for those related to CAD. Interestingly, we find a dynamic pattern where inpatient care usage first increases and then decreases after the cost-sharing policy change, which may be driven by two effects: health information disclosure and health improvement. After ruling out the hypothesis of supply-induced demand, a set of heterogeneity analyses verify the existence of health information disclosure, which increases inpatient care usage by promoting timely care and diagnosis. In contrast to most previous studies, which focus on low-income populations in developed counties, our findings provide insights into considering the adverse effects of cost-sharing policies among low-income people.

Title: The Long-Run Effects of Federal Student Loans on Fertility and Social Mobility

Date: 7 November 2022

Time: 12.00-1.00pm AEDT

Speaker: Yue Hua

Affiliation: CEPAR UNSW

Abstract: U.S. federal student loans relax borrowing constraints in college years but also increase indebtedness in early adulthood, a period when crucial lifecycle decisions such as fertility and early investment for children are made. I use a heterogeneous-agent lifecycle overlapping-generation model with credit constraints, endogenous fertility, and human capital investment to evaluate the long-run effects of federal student loans. I estimate the model to match features of micro-level U.S. household survey data in the 2000s. I find that federal student loans reduce fertility rates but increase college attendance rates and income and have no discernible effects on social mobility. An exogenous fertility model overstates the effects on aggregate output and social mobility.

Direct enquiries to:  Gaoyun (Sophie) Yan

* Note: Subject to COVID-19 restrictions in place at the time, seminars are run in dual mode to allow for both in-person and online presentations and attendance, however, if circumstances restrict in-person attendance, CEPAR will revert to an online event entirely. Attendees will be notified via email.

Monday, November 7, 2022 - 11:00
End date: 
Monday, November 7, 2022 - 12:30
QUAD G026 on the UNSW Kensington Campus, Bedegal Land, AND Zoom