CREA Inaugural Conference
The Centre for Research on the Economics of Ageing (CREA) at was officially launched on the 11th November 2016 with an Inaugural Conference on 'Retirement Adequacy in Singapore – Early Insights from the Singapore Life Panel ®'.
The one-day Conference unveiled the first-of-its-kind research on ageing, based on data gathered from the Singapore Life Panel® (SLP), a population-representative cohort of older people aged between 50 and 70 years old and their spouses, recruited in July 2015. More than 8,000 responses are being received every month by internet to surveys with detailed questions about economic variables such as employment, income and expenditure, factors such as health and household structure, and also expectations and subjective well-being. A longitudinal study of this size and frequency is unprecedented and the research team give great credit to the panel for their ongoing participation and their willingness to provide detailed information on their situations.
The Conference showcased the wealth of information being obtained from the SLP surveys, now in their 16th month, and researchers highlighted some of the early insights into the economic situation of ageing Singaporeans. A full slide pack is available here.
In a presentation on Labour Market Outcomes, significant differences in earnings and retirement behaviour by household wealth and education levels were noted. The median monthly labour income of workers with post-secondary education is more than twice that of workers with only secondary education and almost four times more than for workers with only primary education. Individuals with a primary education work more frequently at older ages than individuals with post-secondary education: among 65-69 year-olds the percentage of individuals with primary education who are retired is about 25 percentage points less than the percentage among those with post-secondary education.
About 36% of 50-59 year old individuals expect to work full-time at age 65. However, the proportion among 65 year olds currently working full-time is about 26%. About 21% expect to work full-time at age 70, yet just 16% of 70 year-olds are now working full-time. The difference between employment expectation and current actual employment suggests that labour force participation among older workers will continue to increase. After becoming unemployed, men are more likely to remain unemployed while women are more likely to drop out of the labour force.
The presentation on Economic Position and Preparation for Retirement revealed that the income of the SLP mostly comes from work, self-employment, financial investments, CPF accounts and rent. Making up their wealth is housing, CPF accounts and financial investments. Income from work is lower among those aged 60 to 69, whereas income from CPF accounts and from financial investments is higher. Income increases sharply by education level and is much higher among married persons than singles.
The surveys showed that marital status and education have important associations with saving. The average spending by single persons is greater than their average income among those with a primary or a secondary education, but lower among those with a post-secondary education. Married persons spend less than their average income, except for men aged 60 to 69 with only a primary education. These early findings indicate that there is an empirical basis for concern: about 60% of respondents characterized their economic preparation for retirement as fair or poor.
The presentation on Household Spending and its Components showed that spending is highest among those in their early 50s. About 20% of 50 to 70 year-old respondents report having bought things on behalf of others last month, highlighting the importance of intergenerational linkages in Singapore.
Older households in Singapore spend about 18% of their budget on food and about 16% on transportation. Budget shares for these and for other spending categories vary with age. The share spent on food, for example, is higher at older ages whereas the share spent on transportation is lower. Households where the respondent is in bad health spend more on health care and less on leisure activities.
Spending declines by about 20% in the months following unemployment, and while there is some variation in the reduction by category, all categories are affected including spending for health care.
Looking at Financial Literacy and Portfolio Complexity, the experts concluded that that older Singaporeans’ levels of financial literacy in Singapore are comparable to those in the United States. However, both fare somewhat worse than their counterparts in several European countries.
They also found that financial literacy is positively associated with respondents having both more wealth and better-diversified portfolios. And as in many other countries, the women tend to be less-informed about stock diversification, and educated people, more financially knowledgeable.
The researchers obtained rich information on the different types of medical expenditures and the occurrence of new minor and major chronic health conditions for their topic, Health Shocks and Household Expenditures for the Elderly. It reflected potential for considerable persistence in the impact of a shock on household finances, and that this persistence is greater for major conditions (diabetes, heart disease or stroke) and specific services (hospital services). This is of particular concern for Singapore with a growing elderly population at considerable risk of chronic conditions. Further research on how non-health spending of the elderly adjusts to these shocks is warranted.
In Housing Wealth, the SLP data confirm that a large fraction of household total wealth is held in housing equity. This is true throughout the wealth distribution. However, it is especially so for households living in HDB 4-room flats or smaller, who have little else. To help finance their retirement, it will be important that these households are able to effectively access their housing equity. Currently, few of these participate in the housing monetisation schemes (Silver Housing Bonus and Lease Buyback Scheme).
For the topic of Behavioural Risk and Chronic Conditions, respondents were asked about their expectations of getting a range of conditions such as diabetes or stroke. Interestingly, overall respondents who are overweight or obese report a heightened risk for a range of diseases. The exception is people with only a primary education, who seem not to expect an elevated risk of diabetes, heart disease or stroke.
In Subjective Well-Being, it was noted that traditionally, policymakers have gauged the well-being of the population by measuring economic indicators, especially income and wealth. However, many other aspects are likely to influence their well-being such as their health status, social contacts, or sense of security. The Singapore Life Panel® collects monthly data on several dimensions of subjective well-being, following the same individuals over time. The subjective measures of well-being include satisfaction with life as a whole, with social and family contacts, with one’s job or other daily activities, with one’s economic situation and with health.
This study found that people with higher education, higher wealth and income and in better health report higher levels of subjective well-being across all dimensions. Analysing trajectories of subjective well-being following the same individuals over time revealed that when a health shock or an unemployment shock occurs, individuals immediately report lower subjective well-being. Similarly, those who become re-employed increase their reported subjective well-being and so do those whose health changes from bad to good.
The event was covered by several news media outlets, see the following:
Channel NewsAsia: CHANNEL NEWSASIA COVERAGE ON “SMU STUDY ON AGEING”
Channel U: CHANNEL U COVERAGE ON “SMU STUDY ON AGEING”
Channel 8: CHANNEL 8 COVERAGE ON “SMU STUDY ON AGEING”
Channel 5: CHANNEL 5 COVERAGE ON “SMU STUDY ON AGEING”
Lianhe WanBao: A QUARTER OF POPULATION ABOVE 65 HAVE CHRONIC CONDITIONS
Berita Harian: 25% AGED ABOVE 65 DEVELOPED CHRONIC DISEASE LAST YEAR
Tamil Murasu: SURVEY SAYS 1 IN 4 ELDERLY HAS A CHRONIC ILLNESS
The Business Times: LONGITUDINAL STUDY AIMS TO CAST LIGHT ON RETIREMENT ADEQUACY
The Straits Times: 1 IN 4 SENIORS DEVELOPS CHRONIC CONDITION, EARLY FINDINGS SHOW
AsianScientist: AGEING ISN'T A TSUNAMI