Economics research seminar: Maryam Naghsh Nejad, UTS
Research topic: Early pension withdrawal after a health shock: an analysis of the impact of cancer on retirement savings and income.
Presenter
Topic
Early pension withdrawal after a health shock: an analysis of the impact of cancer on retirement savings and income.
abstract
Unexpected health shocks can be extremely disruptive. Cancer is often diagnosed at a random and unexpected time in someone’s life, even for those with a greater likelihood of getting ill due to hereditary and environmental factors. An unexpected illness could cause financial hardship for those in precarious employment situations or those without adequate savings. Early access to retirement savings for those with ill health or disability is allowed in a range of countries, including the United States, Canada, and Australia. We focus on early withdrawals from Australia’s mandatory private retirement saving system, which tend to be rare but can occur for compassionate grounds. Using a dynamic difference-in-difference framework and full population data we find that the likelihood of early withdrawals significantly increases in the year of or the year after chemotherapy. Those most likely to rely on this means of financial support are those who already needed support with day-to-day tasks, males, those with a mortgage, lone parents, and those with high medical costs. In Australia, people are unable to access disability support payments while cancer treatment is ongoing. This means that there is no government support for cancer patients other than unemployment support payments or the early withdrawal of Superannuation. With an increase in casual employment and short-term contracts, people are more vulnerable to unexpected health shocks and there is a need for government support for those undergoing chemotherapy who have no other means of support available.
