elsa english longitudinal study of ageing economic data analysis and findings zoe oldfield

ELSAEnglish LongitudinalStudy of Ageing

Economic data analysis and findingsEconomic data analysis and findings

Zoe Oldfield


Dimensions of economic statusDimensions of economic status

Food

Housing

Durables

Income

Wealth

Consumption

Employment income

Benefit income

Asset income

Pensions/annuities

Private transfers

Pensions

Housing

Financial assets

Physical assets


Financial information in ELSAFinancial information in ELSA

Detailed components of income and wealth collected

Information collected using techniques designed to minimise non response

Income (except earnings) and wealth collected at the “financial unit” level


The derived financial dataThe derived financial data

Income and asset data – Benefit unit level– Includes imputed data (flagged)

Private and State Pension wealth data – calculations based on:– Self-reported plan details– Imputed earnings history

In the longer term we will be able to refine calculations based on– NI records (c.75% give permission to link)– Earnings/employment/pension histories


Summary income variablesSummary income variables

(eq)totinc Total income

(eq)empinc Employment income

(eq)seinc Self employment income

(eq)ppinc Private Pension income

(eq)spinc State Pension income

(eq)beninc State Benefit income

(eq)assinc Asset income

(eq)othinc Other income

yq5(10) Equivalised income quintile(decile)


Summary wealth variablesSummary wealth variablesgrossfw Gross financial wealth

netfw Net financial wealth

grosstotnhw Gross total non-housing wealth

nettotnhw Net total non-housing wealth

netpw Net physical wealth

ghwealth Gross housing wealth

nhwealth Net housing wealth

nettotw Net total wealth

debt Financial debt

tnhwq5(10) Net total non housing wealth quintile(decile)

nfwq5(10) Net financial wealth quintile(decile)

totwq5(10) Net total wealth quntile(decile)


Pension wealth variablesPension wealth variables

Assuming retirement in 2002Private pension wealth (pripenw1_2002)

State pension wealth (statepenw1_2002)

Assuming retirement at SPAPrivate pension wealth (pripenw1_SPA)

State pension wealth (statepenw1_SPA)

Baseline assumptions +

Variations in:

Discount rate

Contracting out rates


Some key findingsSome key findings

The distribution of retirement resources for those aged 50-SPA

Labour market participation

Future expectations


.0

50.0

100.0

150.0

200.0

250.0

300.0

350.0

400.0

450.0S

ing

le M

en

Sin

gle

Wo

me

n

Co

up

les

All

£ '0

00

The distribution of pension wealth, The distribution of pension wealth, 50-SPA50-SPA

Private pension wealth

State pension wealth


.0

50.0

100.0

150.0

200.0

250.0

300.0

350.0

400.0

450.0S

ing

le M

en

Sin

gle

Wo

me

n

Co

up

les

All

£ '0

00

The distribution of pension wealth,The distribution of pension wealth,50-SPA50-SPA


The distribution of non-pension wealthThe distribution of non-pension wealth

0

50

100

150

200

250

50

-54

55

-59

60

-64

50

-54

55

-59

60

-64

50

-54

55

-59

60

-64

No

n-p

en

sio

n w

ea

lth, £

'00

0

mean

25th percentile

median

75th percentile

Single Men Single Women Couples


Correlation between pension and non-Correlation between pension and non-pension wealthpension wealth

.0

50.0

100.0

150.0

200.0

250.0

300.0

350.0

400.0

Po

ore

st 2 3 4 5 6 7 8 9

Ric

he

st

Non-pension wealth decile

To

tal p

en

sio

n w

ea

lth, £

'00

0

Mean

75th percentile

Median

25th percentile


“Now I have some questions about how likely you think various events might be. When I ask a question I'd like you to give me a number from 0 to 100, where 0 means that you think there is absolutely no chance an event will happen, and 100 means that you think the event is absolutely certain to happen.”

… What are the chances that you will live to age 75?

Measuring subjective expectations in ELSA


Expected longevity and wealthExpected longevity and wealth

0

10

20

30

40

50

60

70

80

Poo

rest

2nd

3rd

4th

Ric

hest

Poo

rest

2nd

3rd

4th

Ric

hest

Poo

rest

2nd

3rd

4th

Ric

hest

% c

hanc

e

Aged < 66 Aged 66-69 Aged 70-74

chances of living to ...

age 75 age 80 age 85


Actual and self-reported chances of living to 75

0

20

40

60

80

100

50-54 55-59 60-64 50-54 55-59 60-64

Pe

r ce

nt

Self-reported Actual

Men Women


Labour market participation Labour market participation Findings so farFindings so far

Labour market non-participation is U-shaped in wealth


Male inactivity rates by age Male inactivity rates by age and wealth quintileand wealth quintile

0

20

40

60

80

1 2 3 4 5 1 2 3 4 5 1 2 3 4 5

Pe

rce

nta

ge

Retired Other inactive

50 to 54 55 to 59 60 to 64


Expectations of being in work at age Expectations of being in work at age 60 (65), by wealth decile60 (65), by wealth decile

0

10

20

30

40

50

60

70

80

Poorest 2 3 4 5 6 7 8 9 Richest

Wealth deci le

Pro

babi

lity

/%

Men 50-59 Men 60-64


Findings so farFindings so far


Current health correlated with expectations of return to work for those currently inactive


Expectations of working, by age and health: Expectations of working, by age and health: Inactive individualsInactive individuals

0

5

10

15

20

25

50 to 59 60 to 64 50 to 54 55 to 59

excellent/verygood/good

fair/poor

Men Women

Average chances of working at …

60 65 55 60


Findings so farFindings so far


Current health correlated with expectations of return to work for those currently inactive

No real relation between current health and expectations remaining in work for those currently working


Expectations of working, by age and health: Expectations of working, by age and health: Active individualsActive individuals

0

10

20

30

40

50

60

70

80

90

100

50 to 59 60 to 64 50 to 54 55 to 59

excellent/verygood/good

fair/poor

Men Women

Average chances of working at …

60 65 55 60


Final thoughtsFinal thoughts

Future data releases will add further value:– longitudinal dimension– linkages to administrative data

More analysis coming out all the time


Other research in progressOther research in progress

More on distribution and adequacy of saving for retirement– Working paper (forthcoming)– Report series

Cognitive ability, numeracy and asset holding (in particular pension knowledge)

More on expectations of longevity

elsa english longitudinal study of ageing economic data analysis and findings zoe oldfield

Documents

elsa slide

non pension wealth slide

wealth quintile slide

wealth decile slide

distribution of pension

spa slide

wealth current health

inactive slide