Hong Kong is one of the most prosperous places in the world, but it has a rapidly aging society with a very high rate of poverty among older people. Addressing this has become a priority for policymakers to improve the well-being of older people, while sustainably managing the burden on public finances.
In 2016, using survey data and a macro-simulation, Professor Chou Kee-lee, Chair Professor of Social Policy of the Department of Asian and Policy Studies and Associate Vice President (Research) at The Education University of Hong Kong, and his team evaluated how the newly introduced Old Age Living Allowance (OALA) would reduce the old-age poverty rate but also ensure its financial sustainability.
The team found that poverty among the elderly decreased from 32.5% to 27.1% after the introduction of OALA, but that OALA expenditure would increase more than three times by 2064.
Professor Chou’s team conducted a survey of more than 5,000 households and developed a micro-simulation modelling computer programme, which he used to evaluate the anti-poverty effect of three pension reform options. 1) a monthly HK$3,000 universal pension for all adults aged 65 or over; 2) an increase of the OALA Scheme to HK$3,000, while maintaining the current conditions; and 3) increasing the take-up rate of Comprehensive Social Security Assistance (CSSA) to 80%. The team found that the greatest cost-effectiveness would be option 3, followed by option 2.
In 2014 and 2016 Professor Chou and his team’s research on pension reform found that 70% to 80% of participants supported a universal pension, while about 50% supported the means-tested one. His 2014 research on policy options to alleviate poverty among the elderly reminded the public and policy makers that one of the most important functions of retirement income protection was to reduce poverty among the elderly.
The other main impact of his research was its use as a key source of evidence to support policy change and to inform policy debate and discussion, through presentations of his findings on the relative popularity of different types of annuity schemes to various government departments and agencies. This influenced decision making and policy development by balancing out the policy formulation process, through taking the views of the public into account.
His 2014 and 2016 survey findings on Retirement Income Protection Reform guided the pension reform debate by identifying contrasting public views and finding that the majority of the general public supported a universal pension.
In extensive media appearances, Professor Chou publicised and disseminated his findings. His 2014 findings were widely covered in the media, reaching over 10 million readers and viewers. This changed public perception of a pension scheme being the best policy to reduce poverty among the elderly in Hong Kong, and thus put pressure on the Government to change direction.
Professor Chou’s work has also been used by NGOs to advocate the rights of the poor and ensure income protection for older people. Most of the measures advocated by Professor Chou have since been adopted by the Government, including a means-tested OALA and increased CSSA coverage, thus helping alleviate poverty among older adults in Hong Kong.