4.2 Forecasting future participation rates of older people
The model can also be used to obtain some idea of the future evolution of participation rates, although there are some limitations. Projections over the next ten years (i.e. two census periods) using the estimated parameters in this model suggest that the participation rates of older males and females will remain quite buoyant, assuming the age of NZS eligibility remains at 65.
A simulation of the effect of a further rise in the age of eligibility, to 66 by 2006 and to 68 by 2011, is illustrated in Figure 10 and Figure 11, for males and females respectively. This suggests that the participation rate of the 65+ group would be around 3 percentage points higher for males and 6 percentage points higher for females. However, one needs to be cautious in interpreting these estimates, since they are very sensitive to the form of the time trend chosen for female participation. Furthermore, the effect would be concentrated in only a small proportion of this open-ended age band.[28]
Notes
- [28]Currently 17 percent of the 65+ age group are aged below 68 and so would be directly affected by this simulated policy change. However, once the baby boomers start to enter that age group, around 2011, this proportion will start to rise.
