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An ageing society: A working life/retirement perspective

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Author
Bruce Bacon
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Conference Paper 96/4

Paper presented at the 8th National Conference of the Australian Population Association, 3-6 December 1996.

The RIM Task Force is charged with developing public policy models and analytical tools to investigate the interaction of demography, social security, taxation and superannuation.

To support this objective a parameter research program was established to analyse the fundamental socio/economic structural shifts occurring in "Australia’s Population into the Next Millennium".

A principle aim of the parameter research program is to provide the disaggregated demographic parameter sets which are critical for successful modelling of aggregate superannuation. The demographic variables of interest to RIM include the sex, age and income deciles stucture of: population levels, fertility, deaths, migration, labour force status by full/part-time and public/private, disability, retirement, pensioners and career earnings.

Many previous studies have raised the question, "how serious is the ageing problem"? This paper draws on the RIM parameter research to provide some insight into the dynamics of the ageing society through a study of work and retirement. The paper argues that the usual measure of age dependency used to analyse the ageing problem should be replaced by a broader measure of retired dependency. Using this measure the paper assesses the burden that future workers will face in supporting the growing number of retired.

The paper illustrates two innovative techniques used to model retirement behaviour:

  • non-parametric smoothing with discontinuities, and the
  • transformation of cross-sectional stock data into longitudinal flow profiles.