4 Concluding Discussion
The research reported here has attempted to unpick some of the associations between living standards (material well-being) and each of current income and accommodation costs in a way that helps to bring out the underlying drivers. What at first glance may appear to be simple associations can sometimes mask more complex relationships. The relationships between current income and accommodation outlays on the one hand and material well-being on the other should not be interpreted as fully and directly causal. The way they ‘explain’ material well-being seems to depend not simply on the dollar amounts involved, but also on the source or nature of the amounts, and these secondary factors may signal some precursors to the situation observed at the time of the survey.
We suggest that these precursors, which probably include health status, human capital, stable employment history, savings propensities, home ownership and successful financial planning, may offer some useful lessons for public policy design. Earlier interventions for younger age groups may be desirable to help address the risk factors and promote the resilience factors that we suspect influence living standard outcomes in old age. Clearly, many of these factors will affect people’s ability to generate income and accumulate assets throughout their working lives. However, their influence may also extend beyond the strictly material domain and encompass other components of life satisfaction.
These comments should not be taken as implying that the challenge for older people of balancing weekly incomes and expenses is of little policy relevance. It is. Those people in the survey who scored low on the material well-being scale were clearly struggling to make ends meet. The point we wish to bring out is that not all people on the same income or with the same accommodation expenses face the same struggle. Other factors, financial and nonfinancial, historical and current, can be expected to mediate the effect of the size of the weekly budget on living standards.
The fact that living standards vary so much among older people with similar incomes suggests that, despite its merits from several points of view, flat-rate universal income support alone is not particularly efficient or effective in addressing pockets of hardship. For this reason, supplemental forms of assistance for older New Zealanders, in cash or in kind, targeted on identified need are likely to remain important components of the overall social protection system.
Our conclusions echo some of the policy themes articulated in the original report (Fergusson et al., 2001a, pp. 51-52). First, the current system of income support has been successful in protecting the great majority of older people from hardship. Second, supplementary assistance might need to be targeted to the minority of the older population who are facing some degree of material and economic hardship. Third, many of the factors influencing the material well-being of older people are likely to reflect events and circumstances that occurred before retirement rather than their current economic circumstances. The additional insight we believe our work offers is to strengthen and extend the third point by illustrating how even the indicators of current economic circumstances include components that may have links back to differences that played out through earlier stages of the life course.
