Download This PaperCOVID-19 Private Pension Withdrawals and Unemployment Tenures
76 Pages Posted: 17 Mar 2023
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COVID-19 Private Pension Withdrawals and Unemployment Tenures
COVID-19 Private Pension Withdrawals and Unemployment Tenures
Date Written: June 27, 2022
Abstract
This is the first study to evaluate the effects of early pension withdrawal policies on tenures on unemployment payments in the COVID-19 context. We use a novel set of linked whole-of-population administrative records to examine more than half-a-million Australians who found themselves newly on an unemployment payment in the initial months of the COVID-19 pandemic. We estimate that receiving a lump sum of up to A$10,000 from superannuation accounts at the most acute phase of the pandemic, between April and June 2020, resulted in a 32 per cent lower exit rate from unemployment benefits inside the first six months of a spell on benefits, and 14 per cent inside a year of spell. Receiving a lump sum during the second window of opportunity – mostly in July and August 2020 and as a labour market recovery was underway – resulted in a 34 per cent lower exit from unemployment benefits inside the first nine months of spell, and 14 per cent inside fifteen months of spell. The job-seeking deterrence is ultimately temporary but it took close to eighteen months for an estimated convergence between withdrawers and those that didn’t withdraw. 162,000 withdrawers with completed spells on average spent an additional 7 weeks on unemployment payments, translating to 8 million additional days in aggregate, and implying A$580 million in additional pandemic fiscal expenditure.
Keywords: Unemployment, crisis management, fiscal policy, government expenditure, unemployment benefits, welfare programs, private pensions
JEL Classification: E24, H12, H30, H53, J32
Suggested Citation: Suggested Citation
Tristram Sainsbury (Contact Author)
Australian National University (ANU) - Crawford School of Public Policy ( email )
ANU College of Asia and the Pacific
J.G. Crawford Building, #132, Lennox Crossing
Canberra, Australian Capital Territory 0200
Australia
Robert V. Breunig
Australian National University (ANU) - Crawford School of Public Policy ( email )
7 Liversidge Street
Lennox Crossing
Canberra, ACT 0200
Australia
61261252148 (Phone)
HOME PAGE: http://https://crawford.anu.edu.au/crawford_people/content/staff/rbreunig.php
