How much new saving will kiwisaver produce?

After two decades of tax neutrality for private saving, New Zealand policy changed radically with the recent introduction of tax incentives for KiwiSaver. A key issue for tax-favoured saving schemes is the extent to which existing saving is reshuffled versus new saving created by reduced consumption. Using data from a nationwide survey carried out by the authors, we estimate that each dollar of KiwiSaver balances represents only $0.09-$0.19 of new saving. The rest is either reshuffling amongst existing saving and debt by KiwiSaver members, or else taxpayer and employer transfers which reduce national saving elsewhere. Homeowners are least likely to fund their KiwiSaver contributions by reducing spending, indicating possible mis-targeting since owners are often blamed for excessive consumption arising from house price wealth effects. There is little evidence that KiwiSaver affects either the reported trend in saving or the presence of dis-saving. Since only one-tenth of households report negative saving, KiwiSaver may be a costly and ineffective solution to a relatively small problem of insufficient household saving

CPI Bias and Real Living Standards in Russia During the Transition

http://deepblue.lib.umich.edu/bitstream/2027.42/40070/3/wp684.pd

The distributional impact of KiwiSaver incentives

New Zealand’s approach to retirement incomes profoundly changed with the recent introduction of KiwiSaver and its associated tax incentives. Previous policy reduced lifetime inequality but KiwiSaver and its tax incentives will increase future inequality and lead to diverging living standards for the elderly. In this paper we evaluate the distributional effects of these tax incentives. Using data from a nationwide survey conducted by the authors, we estimate the value of the equivalent income transfer provided to individuals by the tax incentives for KiwiSaver participation. Concentration curves and inequality decompositions are used to compare the distributive impact of these tax incentives with those for New Zealand Superannuation. Estimates are reported for both initial and lifetime impacts, with the greatest effect on inequality apparent in the lifetime impacts

What Explains the Wealth Gap Between Immigrants and the New Zealand Born?

Immigrants are typically found to have less wealth and hold it in different forms than the native born. These differences may affect both the economic assimilation of immigrants and overall portfolio allocation when immigrants are a large share of the population, as in New Zealand. In this paper, data from the 2001 Household Savings Survey are used to examine wealth differences between immigrants and the New Zealand-born. Differences in the allocation of portfolios between housing and other forms of wealth are described. Unconditional and conditional wealth quantiles are examined using parametric models. Semiparametric methods are used to decompose differences in net worth at different parts of the wealth distribution into the part due to differences in characteristics and the part due to differences in the returns to characteristics.

Saving for Retirement: New Evidence for New Zealand

There is an on-going debate about the level of savings in New Zealand. A fundamental question pervades the debate: namely, are we saving enough? This question arises at two levels: for the economy as a whole and for individual households. At the macroeconomic level, the concern is whether our aggregate level of saving as a nation is "adequate". At the micro level, the same question arises in relation to the saving for retirement: are New Zealanders adequately preparing for retirement? This paper addresses the second of these questions. It develops a model of retirement wealth accumulation based on the findings from the Household Savings Survey. The evidence we present, tentative though it is, does suggest that there may not be widespread undersaving for retirement. The results are consistent with overseas findings. We have chosen conservative assumptions: excluding equity in the primary residence from estimates of retirement wealth, providing for full survivor benefits and assuming that consumption spending would be maintained at pre-retirement levels throughout retirement rather than the typical pattern of falling consumption spending as people age. It must be stressed that there is limited information about the rate at which individuals are actually saving, making it difficult to establish a solid benchmark against which to measure adequacy. We have used the Household Economic Survey as a basis for estimating actual saving rates for different age groups. The estimates are affected by definitions of consumption, in particular how the expenditure on durables is treated. We conduct sensitivity tests where durables are both included and excluded as an item of current consumption. Typically we find that the actual saving rates do in fact exceed the rates needed for maintaining living standards in retirement. This reinforces our tentative conclusion that there is no apparent gross under-saving for retirement especially in the older age cohorts. The results apply to broad groups within which there will be a distribution of people some of whom would likely not be saving at a rate to maintain their real standard of living in retirement. The results in no way imply that every individual is saving “adequately”. While we present results for younger age cohorts, the fact they still have many years to retirement implies that estimates made today inevitably carry much wider margins of error. More unequivocal results must await better data and methodologies; improved measures of household saving levels, and the application of micro-simulation models which are more suited to capturing uncertainty about health status, employment, incomes and life expectancies will improve our understanding of household saving behaviour. New Zealand superannuation (NZS) provides the floor under the income for the lowest 40 percent of the income distribution, and for many in this group additional saving for retirement would not be a preferred strategy, assuming they were to be aiming to smooth their consumption over the life cycle. In other words our finding that there is no strong evidence of widespread under-saving is not inconsistent with a significant share of individuals not saving for retirement. This follows from the critical role played by NZS in providing those on low incomes with a standard of living in retirement which matched or exceeds that which their pre-retirement incomes can support. For these people the issue is the level of income rather than their level of saving.Savings; household net wealth; retirement; life cycle; New Zealand

Measures of human capital: A review of the literature

Human capital is increasingly believed to play an important role in the growth process, however, adequately measuring its stock remains controversial. This paper identifies three general approaches to human capital measurement; cost-based, income-based and education-based, and presents a critical review of the theories and their applications to data from a range of countries. Emphasis on empirical evidence will be given to the case of New Zealand.human capital, economic growth

Housing in the Household Portfolio and Implications for Retirement Saving: Some Initial Finding from SOFIE

Housing is an important sector of the economy. It has widespread implications for investment, banking, saving and employment. Home ownership has been linked to building social capital and a sense of community. Furthermore housing equity is a significant element of retirement accumulation for many New Zealanders. The Treasury maintains a programme of work related to housing, saving, wealth accumulation and retirement. The results of this contribute to Treasury's role in providing advice to the Minister and at the same time informing a wider group of external stakeholders. This paper uses unit record data from a new panel survey (SOFIE) to study housing wealth in household portfolios. It then estimates the rates of saving that would be needed to smooth consumption between pre- and post-retirement. Finally it explores the effect of some home equity withdrawal on the required saving rates. The main findings of this study are: • 60% of households are recorded as owning a home; • Almost half of home-owning households have no mortgage debt; • One in six households own residential investment property; • One in twelve households own a rental property; • Patterns of property ownership in New Zealand are similar to those in selected comparator countries; • Housing represents a major share of household wealth, and this share has risen in line with the increase in house prices; • The composition of household portfolios is comparable to other selected countries except for the USA ; • Empirical results indicate that even if households planned to draw down half of housing equity to support retirement income, the impact on the saving rate needed to smooth consumption would be modest.Consumption smoothing, home equity, household portfolio, household wealth, housing, life cycle, retirement, savings

Allelic segregation and independent assortment in <i>T. brucei</i> crosses: proof that the genetic system is Mendelian and involves meiosis

The genetic system on Trypanosoma brucei has been analysed by generating large numbers of independent progeny clones from two crosses, one between two cloned isolates of Trypanosoma brucei brucei and one between cloned isolates of T. b. brucei and Trypanosoma brucei gambiense, Type 2. Micro and minisatellite markers (located on each of the 11 megabase housekeeping chromosomes) were identified, that are heterozygous in one or more of the parental strains and the segregation of alleles at each locus was then determined in each of the progeny clones. The results unequivocally show that alleles segregate in the predicted ratios and that alleles at loci on different chromosomes segregate independently. These data provide statistically robust proof that the genetic system is Mendelian and that meiosis occurs. Segregation distortion is observed with the minisatellite locus located on chromosome I of T. b. gambiense Type 2 and neighboring markers, but analysis of markers further along this chromosome did not show distortion leading to the conclusion that this is due to selection acting on one part of this chromosome. The results obtained are discussed in relation to previously proposed models of mating and support the occurrence of meiosis to form haploid gametes that then fuse to form the diploid progeny in a single round of mating

Overshooting Americanisation. Accent stylisation in pop singing – acoustic properties of the bath and trap vowels in focus

The paper addresses the problem of overshoot involved in singing accent stylisation. Selected phonetic features indexed as “American” and “Cockney” are analysed in the singing and speaking styles of a British vocalist, Adele. Overshoot, understood as a greater frequency or an exaggerated quality of a given feature, is characteristic of staged performance (Bell and Gibson 2011; Coupland 2007). PRAAT is used to establish the acoustic properties (F1 and F2) of the BATH and TRAP vowels, as well as the presence or absence of the BATH-TRAP split. The results show that Americanisation regarding the BATH-TRAP split in singing is present and the Americanised vowel tokens are “overshot”, having higher F2 frequency compared with the regular British TRAP vowel

Constraints on Early Nucleosynthesis from the Abundance Pattern of a Damped Ly-alpha System at z = 2.626

We have investigated chemical evolution in the young universe by analysing the detailed chemical enrichment pattern of a metal-rich galaxy at high redshift. The recent detection of over 20 elements in the gas-phase of a damped Lyman-alpha absorber (DLA) at z = 2.626 represents an exciting new avenue for exploring early nucleosynthesis. Given a strict upper age of ~2.5 Gyr and a gas-phase metallicity about one third solar, we have shown the DLA abundance pattern to be consistent with the predictions of a chemical evolution model in which the interstellar enrichment is dominated by massive stars with a small contribution from Type Ia supernovae. Discrepancies between the empirical data and the models are used to highlight outstanding issues in nucleosynthesis theory, including a tendency for Type II supernovae models to overestimate the magnitude of the "odd-even" effect at subsolar metallicities. Our results suggest a possible need for supplemental sources of magnesium and zinc, beyond that provided by massive stars.Comment: 12 pages, 7 figs. Accepted for publication in ApJ (The Astrophysical Journal