6 Income
In this section, interest focuses on the association of a range of factors with both the level and adequacy of income. Three models were estimated. The first, a regression model, is for the level of reported income. The second, a logistic model, refers solely to those in the working group and relates to whether in their judgement they are satisfied with the level of family income they expect to have in retirement. The third model, a logistic model, relates to both working and retired groups, to whether the respondent felt his or her total income was enough to meet basic everyday needs (including accommodation, food and clothing and other necessities). The results of each of the three models are summarised in Table 6-1, while the complete results are given in Appendix Tables C.2–C.4. The direction and level of significance of the association of each of the variables with income is indicated by plus and minus signs for a positive and negative association respectively. The number of signs indicated the degree of significance: three is associated with a variable whose regression coefficient was significant at the 1% level while two and one are associated with 5% and 10% significance levels respectively.
| Explanatory variable | Level of income | Satisfied with what my family income will be in retirement (Working group only) |
I have enough income to meet basic everyday needs |
|---|---|---|---|
| Working | +++ | na | ns |
| Physical health | ns | --- | +++ |
| Mental health | ns | --- | +++ |
| Male | ++ | ns | ns |
| Māori | --- | - | --- |
| Other ethnicities | - | ns | --- |
| Main urban | ns | +++ | ns |
| Other urban | ns | ns | + |
| Tertiary education | ++ | - | ++ |
| Separated | -- | ns | ns |
| Widow/er | -- | ns | ns |
| Never married | --- | -- | ns |
| Married with working spouse | ns | ns | ++ |
| On a benefit | --- | ns | --- |
| Receiving NZ Super | --- | -- | ns |
| Receiving other super | ns | - | - |
| No. of dependants | ++ | ns | ns |
| Plans to stop work | ns | - | ns |
| Positive aspects of retirement | ns | ++ | --- |
| Negative aspects of retirement | --- | +++ | --- |
| Income | na | --- | +++ |
| Wealth | +++ | --- | +++ |
Notes:
1 Only those explanatory variables that were statistically significant are shown in this table.
+++ or --- = significant at the 1% level; ++ or -- = significant at the 5% level; and + or - = significant at the 10% level.
2 The table of full results is given in Appendix Tables C.2-4.
For those in the working group, their income is higher than among the retired group by some $33,000. The results indicate that after controlling for other factors we fail to reject the hypothesis that neither the physical nor mental health scores are associated with the level of income. While improved health, both physical and mental, is found to be positively related to income, the relationships are not statistically significant. Working respondents with better mental and physical health reported that they are less likely to be satisfied with their expected income in retirement. This could imply they were more concerned to increase their retirement savings to achieve a better standard of living in retirement. However, in contrast, amongst all respondents, there was a strong positive association between their health scores and the ability to meet basic needs with their current income. While higher health scores were not associated directly with higher incomes, better health was associated with a positive view of the ability to meet basic needs.
While there is a highly significant association between better health and the respondent reporting they had enough income to meet basic needs, it is important to assess the absolute magnitude of the effect. In some cases this might be very modest even though it is statistically significant. One way to assess this is by the use of the odds ratio. Based on this measure, a five point increase in the physical and mental health scores would result in an increase in the odds of being able to meet basic needs of 11% and 14% respectively.
In a similar manner, one can compute the impact of being on a benefit. For those on a benefit, the odds of claiming to have enough income to meet basic needs is 65% lower than the odds for those not on a benefit. Likewise, being Māori implies that the odds of claiming to be able to meet basic needs from reported income is 25% less than for NZ Europeans, after controlling for a wide range of other variables.
