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As governments raise pension-claiming ages in response to population ageing, it is vital to understand the distributional effects of these reforms. Todd Morris examines this question in the context of an Australian reform that gradually raised women’s pension age from 60 to 65. Using detailed longitudinal survey data from 2001 to 2015, Todd Morris finds that women responded by remaining on other transfer programs and delaying retirement, but the effects varied for different groups. Non-poor and married women explain relatively little of the claiming and labour supply responses, and their financial security was unharmed, with married women aided by spousal labour supply responses. In contrast, low-wealth and single women explain most of the response, and a meaningful fraction encountered financial hardship. Overall, Todd Morris estimates that the reform increased relative poverty among affected women by 38–78 per cent, with the increase occurring mainly among singles, demonstrating that broad-based retirement reforms can have important distributional effects.
Todd Morris is a final-year PhD Candidate at the University of Melbourne. Todd is an applied microeconomist with research interests in the fields of labour economics, public economics and health economics. You can read more about Todd’s work here.
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