Do Government Benefits for High Income Retirees Encourage Saving?

Peter Matthew Siminski ()

Economics Working Papers from School of Economics, University of Wollongong, NSW, Australia

Abstract: The Australian Commonwealth government provides a set of benefits to high income older people, which are intended to promote saving for retirement. It has not been established whether this unusual policy is effective. Using illustrative models, it is shown that these benefits may induce some people to save and work more, but they may have the opposite effect on other, more affluent, people. It is unclear which effect dominates. These benefits are likely to have increased Commonwealth government expenditure on affluent older people, accompanied by a reduction in state government expenditure on people with slightly lower incomes.

Keywords: retirement; saving; incentives; Australia (search for similar items in EconPapers)
JEL-codes: D91 H31 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-age and nep-lab
Date: 2008

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