Australian Social Policy Journal no. 9 - Abstracts

The asset portfolios of older Australian households

Deborah A Cobb-Clark1 & Vincent A Hildebrand2

  1. Economics Program, Research School of Social Sciences, The Australian National University and Institute for the Study of Labor (IZA) Bonn
  2. Department of Economics, Glendon College, York University and CEPS/INSTEAD, Luxembourg

Abstract

This paper investigates whether there is evidence that households adjust their asset portfolios just prior to retirement in order to maximise their eligibility for a means-tested public pension. To this end, we take advantage of recently available, detailed micro data for a nationally-representative sample of Australian households to estimate a system of asset equations that are constrained to add up to net worth. Our results provide little evidence that in 2006 healthy households or couples were responding to the incentives embedded in the asset and income tests used to determine Australian Age Pension eligibility by reallocating their assets. While there are some significant differences in asset portfolios associated with having an income near the income threshold, being of pensionable age and being in poor health, these differences are often only marginally significant, are not robust across time, and are not clearly consistent with the incentives inherent in the Australian Age Pension eligibility rules. Any behavioral response to the incentives inherent in the Age Pension means test in 2006 appears to be predominately concentrated among single pensioners who are in poor health. In 2002 there is also evidence that healthy households above pension age held significantly more wealth in their homes than did otherwise similar younger households, perhaps suggesting some reduction in the incentives to reallocate assets over time.

Keywords: asset portfolios; means testing; public pension; household wealth

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Changes in household expenditure associated with the arrival of newborn children

Jason D Brandrup & Paula L Mance

Research and Analysis Branch, Department of Families, Housing, Community Services and Indigenous Affairs

Abstract

An understanding of the changed financial circumstances of families with newborn children is important to a range of current policy debates, including those surrounding the provision of family assistance, women’s attachment to the labour force and paid parental leave. Although there is a body of Australian research on the costs of raising children, in most cases this has been undertaken to enable the calculation of child support entitlement or to evaluate the effects of policy designed to reverse the effects of an ageing demographic. These studies do not report specifically on expenses associated with the arrival of newborn children.

To address this gap in the evidence base, the current study investigates changes in household expenditure associated with the arrival of newborn children for three groups of families—those experiencing the arrival of their first, second, or third and subsequent-born children. Household spending items in Waves 6 and 7 (2006 and 2007) of the Household, Income and Labour Dynamics in Australia (HILDA) survey are used to estimate whether different categories of expenditure typically increase or decrease for couple families with the arrival of newborn children. This study shows that a range of expenditure categories are influenced by the arrival of a new baby. Parents of first-born children increase expenditure on health care and clothing. Parents of second-born children increase expenditure on health care, and on meals eaten out and takeaway; however, they decrease expenditure on child care. Parents of third and subsequent-born children increase expenditure on health care.

Keywords: household expenditure; child costs; newborn children, family policy, HILDA

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Deriving an evidence-based measure of job quality from the HILDA survey

Liana Leach1, Peter Butterworth1, Bryan Rodgers2 and Lyndall Strazdins3

  1. Centre for Mental Health Research, The Australian National University
  2. Australian Demographic and Social Research Institute, The Australian National University
  3. National Centre for Epidemiology and Population Health, The Australian National University

Abstract

The Household, Income and Labour Dynamics in Australia (HILDA) survey includes twelve items that assess different psychosocial characteristics of work. However, these items are not drawn from an established scale and, therefore, we do not know the best way to combine the items, or indeed the validity of doing so. The current study uses several different statistical methods to develop measures of the psychosocial characteristics of jobs using these items. Consistent with previous research and theory, the results show that the twelve HILDA survey items reflect three key components of psychosocial job adversity: job demands and complexity, job control and job security. This factor structure was consistent across the seven waves of the survey data available for analysis. Based on the current findings, we plan to use the psychosocial job quality items to investigate the relationship between job adversity and physical and mental health over time.

Keywords: job quality, measurement, factor analysis, longitudinal, HILDA survey

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Sequence matters: understanding the relationship between parental income support receipt and child mortality

Peng Yu

Research and Analysis Branch, Department of Families, Housing, Community Services and Indigenous Affairs

Abstract

Previous research indicates there is a complex relationship between parental income support receipt and child mortality. This research improves understanding of the relationship using a unique administrative dataset, the Second Transgenerational Data Set (TDS2), which contains information on 127,826 Australian children, almost a whole birth cohort, and their parents. Generally, parents of children who died under age 15 years were more disadvantaged and were on income support for longer periods than were other parents. A robust finding of the research is that the association between child mortality and parental income support receipt varied significantly with the time of the receipt—before, at or after child death. In particular, the incidence of parental income support receipt reduced significantly following the death of a child, probably due to a temporary loss of income support eligibility. The research suggests that income support receipt has more complicated implications than simply as an indicator of economic disadvantage in such a case, and recommends enhanced social and economic support to bereaved parents and families.

Keywords: child mortality, income support, economic disadvantage, Australia

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Regional living and community participation: are people with disability at a disadvantage?

Samara McPhedran

Research and Analysis Branch, Department of Families, Housing, Community Services and Indigenous Affairs

Abstract

There is considerable evidence that people with disability are at a heightened likelihood of experiencing disadvantage in many facets of life. A greater likelihood of disadvantage may in turn increase the risk of exclusion from a range of opportunities, including social participation. However, factors that may lead to ‘double disadvantage’ among people with disability—such as living outside major cities—have not been well assessed in Australia in relation to social connectedness. The current study compared various socioeconomic, life satisfaction, community participation and social support measures among prime working age regional people with and with no disability. People with disability experienced greater relative disadvantage and reported lower levels of perceived social support compared with people with no disability. Irrespective of disability status, men in regional Australia reported lower levels of social support than women. However, engagement in community activities such as volunteering did not differ as a function of disability status. This in turn suggests potential avenues for consideration in terms of strengthening social connectedness among regional people with disability, and addressing the risk of social exclusion for this group.

Keywords: disability; social participation; regional; community; social support

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Work–life tension and its impact on the workforce participation of Australian mothers

Ibolya Losoncz and Benjamin Graham

Research and Analysis Branch, Department of Families, Housing, Community Services and Indigenous Affairs

Abstract

This paper expands on earlier work by Losoncz and Bortolotto (2009), which identified six distinctive groups of working mothers using six waves of the HILDA survey. The focus of this paper is on the labour market behaviour of working mothers in each cluster, and whether reducing working hours or leaving the workforce has benefits for the health and wellbeing of mothers in each cluster, particularly those experiencing high conflict between work and life. Mothers from clusters with high work–life conflict did not show a higher tendency to exit from paid work than mothers from other clusters. The most likely to exit paid work were mothers who had lower regard for the working mother role. As such, role preference seems to have a greater influence on work decisions. Leaving work or reducing hours did not lead to improved satisfaction with family life or parenthood in any of the clusters, while in some clusters, leaving work or reducing hours improved mental and physical health. Policies that promote greater work–life balance may have a different level of influence on mothers’ workforce participation based on their level of work role identification and particular events in their life course.

Keywords: mothers; working mothers; work–life balance; spillover; cluster analysis

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