Planning Against the Odds

Abstract

New Zealand adults living with disability or long-term health conditions face a measurable retirement-preparedness penalty that survives standard income and education controls. Across the 2021 NZ Financial Capability Survey waves, disabled respondents report lower KiwiSaver participation rates, higher reliance on high-cost debt, and weaker saving habits than their non-disabled counterparts — and the gap is largest precisely in the cohort approaching retirement age, where the time horizon for behavioural correction is shortest.

The behavioural-finance construct best placed to do this work is **financial capability** — the practical knowledge, self-efficacy, and behavioural-skill bundle that distinguishes deliberate from reactive financial behaviour. The 2021 NZ Financial Capability Survey is one of the few NZ-representative instruments that fields a validated capability battery alongside disability-status and long-term-health-condition indicators, retirement-preparedness items, saving-behaviour items, and debt-management practices. The survey design supports the joint examination of disability, capability, and downstream financial behaviours that single-construct studies have lacked.

The existing analysis applies the classical identification stack: OLS regression, Blinder-Oaxaca decomposition of the disability-vs-non-disability preparedness gap, Oster endogeneity bounds establishing robustness to omitted-variable bias, logit estimation for binary saving and debt-management indicators, panel fixed-effects absorbing time-invariant unobservables, and probit estimation for the ordinal retirement-preparedness composite. The existing evidence documents the disability penalty on financial preparedness in the NZ setting and identifies employment and income as the dominant channels, with capability operating as a significant secondary explanator.

The paper is positioned as the NZ companion to the international four-country learning-disability flagship (which provides longitudinal HILDA-based evidence) and the Coelho MoF thesis on disability and retirement (which provides the thesis-level NZ baseline). Together the three form an NZ disability-and-finance research line. The findings identify KiwiSaver supplement design, accessibility-targeted financial-literacy curricula, and debt-counselling services calibrated for the disability community as the highest-return intervention targets.

Data & Methods