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    Housing wealth, mortgages and Australians’ labour force participation in later life

    85251.PDF (521.5Kb)
    Access Status
    Open access
    Authors
    ViforJ, Rachel
    Wood, Gavin
    Cigdem, M.
    Date
    2021
    Type
    Journal Article
    
    Metadata
    Show full item record
    Citation
    Ong, R. and Wood, G.A. and Cigdem, M. 2021. Housing wealth, mortgages and Australians’ labour force participation in later life. Urban Studies.
    Source Title
    Urban Studies
    DOI
    10.1177/00420980211026578
    ISSN
    0042-0980
    Faculty
    Faculty of Business and Law
    School
    School of Accounting, Economics and Finance
    Funding and Sponsorship
    http://purl.org/au-research/grants/arc/DP190101461
    http://purl.org/au-research/grants/arc/FT200100422
    Remarks

    Ong, Rachel, et al. Housing Wealth, Mortgages and Australians’ Labour Force Participation in Later Life, Urban Studies. Copyright © 2021 (Urban Studies Journal Limited 2021). DOI: 10.1177/00420980211026578.

    URI
    http://hdl.handle.net/20.500.11937/85409
    Collection
    • Curtin Research Publications
    Abstract

    In the life cycle model of consumption and saving, homeownership is an important vehicle for horizontal redistribution. Households accumulate wealth in owner-occupied housing during working lives before benefiting from imputed rent streams in retirement. But in some countries housing wealth’s welfare role has broadened as owners increasingly use flexible mortgages to smooth consumption during working lives. One consequence is higher outstanding mortgages later in life, a burden exacerbated by high real house prices that compel home buyers to demand mortgages that are a growing multiple of their incomes. We investigate whether these developments are prompting longer working lives, an idea that is especially relevant in countries offering relatively low government pensions. Australia is one such country. We use the 2001–2017 panels of the Household, Income and Labour Dynamics in Australia Survey to estimate hazard models of exits from the Australian labour force as workers approach pensionable age. We find that those with high outstanding mortgage debts are more likely to postpone retirement, as are those with relatively low amounts of private pension wealth. These results are stronger in urban housing markets, and especially among males.

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