Ross Guest

Ageing, Optimal National Saving and Future Living Standards in Australia

Making allowance for the ageing structure of the population, this paper calculates the levels of optimal national saving and future living ,standards for Australia for the period 1999-2050. For this period, the optimal saving response to the ageing of the Australian population is for national saving to increase from its current level by 2.7 per cent of GDP by the year 2017 and then to decline to the year 2050. The implied growth of living standards is 1.20 per cent per year. Reduced immigration would reduce the rate of growth of living standards but reduced fertility would not. Copyright 2001 by The Economic Society of Australia.

Population ageing and projections of government social outlays in Australia

This paper makes new projections of government social outlays for Australia. The calculations suggest that government social outlays will increase considerably as a percent of GDP over the next 50 years, by 7.3 percent of GDP in the base case. This is a greater increase than that found by previous investigators. Over 60 percent of this increase will occur between 2011 and 2031, the years when the baby boom generation retires. The major contribution to this increase will have come from increased government outlays on social security. Lower rates of net immigration are shown to yield an even larger increase in the percentage of government social outlays in GDP. The paper also considers the disincentive effect of taxation and the effect of increasing the age of retirement. However, notwithstanding the trends suggested by the projections, the paper argues that there are a number of reasons to be sanguine about the implications of ageing on the share of government outlays in GDP.

Will Flexible Learning Raise Student Achievement

Abstract This paper presents both theoretical and survey evidence on the effect of flexible learning—in particular, the shift to a more student‐centred approach to learning—on academic achievement by students. A survey was conducted of 577 business students at a major Australian university in order to elicit their preferences for academic achievement and effort. The results support the theoretical predictions that the effect on academic achievement of greater student autonomy over their learning environment is ambiguous. More academically motivated students and females have a significantly higher probability of choosing a learning technology that provides greater academic reward for effort.

Would A Decrease In Fertility Be A Threat To Living Standards In Australia

Falling rates of fertility in many countries have led to concerns that low fertility is a threat to future living standards. In this article we report simulations of living standards for Australia that take into account the effect of demographic change. These simulations show that reduced fertility would actually increase living standards, albeit by a small amount. We also present projections of government social outlays. These projections suggest that reductions in fertility will have an insignificant or tiny tax-disincentive effect on GDP, thereby reinforcing our conclusion that reductions in fertility are not a threat to future living standards.

A conversation about pedagogical responses to increased diversity in university classrooms

This paper presents a dialogue between an academic economist and an educational developer. It asks whether it is possible to teach in a way that works well for all students. The economist contends that teaching entails making a choice as to which students should benefit most—the more academically capable or the lower‐achieving students. He sees this as a question of social choice. The educational developer suggests that teaching can be organized such that all students can benefit optimally. The dialogue seeks to resolve this difference. It draws on the work of John Biggs, using his diagrammatic representation of the relation between student orientation, teaching method and level of engagement. Biggs debriefs the dialogue. He rejects the focus on particular students andargues rather that teaching should incorporate optimal degrees of freedom in learning activities and assessment, thus enabling levels of engagement for all students to be maximized.

The effects of family benefits on childbearing decisions: a household optimising approach applied to Australia

This article analyses the effect of family benefits on childbearing decisions using an intertemporal utility maximising framework. The childbirth decisions of households are planned jointly with decisions about lifecycle consumption. The model is calibrated using data for Australia drawn, where possible, from the Household, Income and Labour Dynamics in Australia Wave 7 survey. The simulations show that changes in family benefits are likely to have both timing and quantum effects on childbirth but of a small magnitude, which tends to support findings using alternative empirical approaches. The simulations also indicate the effects of indirect family benefits, such as paid maternity leave and policies to reduce the time that mothers spend out of the labour force following child birth.

Quality Assurance and the Quality of University Teaching

The quality of university teaching is increasingly the subject of political rhetoric, but doubt remains about both actual performance outcomes and the role and relevance of the Australian Universities Quality Agency (AUQA). Present quality procedures are found to be inadequate, and scepticism about AUQAs capacity to achieve its aims is well justified for two reasons: the almost complete lack of recognition of the importance of incentives to motivate teachers to allocate effort towards teaching at the expense of research; and the inadequate attention to the need for more accurate indicators of teaching performance. This paper suggests ways of improving the effectiveness of AUQA in raising the quality of university teaching. Two key reforms suggested are: (a) the wide reporting of more accurate teaching performance indicators; (b) a revised university funding model in which university income is based on teaching performance indicators in the same way that research income is based on research performance indicators.

Can OECD Countries Afford Demographic Change

This article provides new calculations on the effects of demographic change on living standards in all 30 OECD countries using the latest demographic projections up to 2050 from the United Nations, World Population Prospects, 2004 Revision. The calculations include several potential dividends that could offset, at least in part, the costs of a lower working age population share. The effects of demographic change calculated here are mechanical in that there is no explicit optimising behaviour. In the worst case scenario, which assumes zero potential dividends and no increase in labour force participation rates, the negative effect of demographic change on living standards among OECD countries over the whole period from 2006 to 2050 ranges from zero to 28 per cent, with an average over all countries of 15.5 per cent. In the best case scenario the average effect is zero. About half of the difference between the best and worst case scenarios is accounted for by higher labour force participation and about half by the potential dividends from demographic change.

Superannuation, Population Ageing and Living Standards in Australia

In this paper we simulate the effect of an increase in the Superannuation Guarantee Levy (SGL) by 3 percent and 6 percent, respectively, on average living standards. We apply the Guest-McDonald model of optimal national saving for a small open economy. The simulations account for the projected age structure of the population, the differences in productivity of workers of different ages and the differences in consumption demands of young and older consumers. In this way we account for the impact of population ageing on living standards. To the extent that an increase in the SGL increases national saving beyond what it would otherwise have been, there are two effects on living standards. One is an intergenerational redistribution of living standards from the present to future generations. The effect is to lower living standards for approximately the next 30 years after which living standards rise, compared to their levels under the benchmark scenario. However, the rise in living standards in the distant future is negligible in discounted terms. The second effect arises from the nature of the SGL as a tax on employment. This reduces employment and therefore reduces the future cash flows available to support living standards. The negative impact of this employment effect on living standards is small according to our calculations.

An evaluation of the saving, investment, and current account balances of five ASEAN economies

This paper evaluates the saving, investment and current account balances (CABs) of five ASEAN economies: Thailand, Singapore, Indonesia, Malaysia and the Philippines over the period 1976 to 1997. The method is to apply a calibrated representative agent model of optimal saving and investment to each of these economies. The model generates optimal saving, investment and CABs for each year from 1976 to 1997 and these are compared with the actual balances. The results suggest that three of the ASEAN countries—Malaysia, the Philippines and Thailand—had below-optimal current account ratios (to GDP) on average over the period 1976 to 1997, for most reasonable values of parameters. This was the result of over-investment for Malaysia and Thailand and under-saving by the Philippines. For Singapore and, to a lesser extent Indonesia, the reverse applies—their current account ratios were above-optimal on average due to over-saving.