2023 Australasian Actuarial Education and Research Symposium

Lucy Yunxi Hu

The Australian National University (ANU)

Expanding the Income Contingent Loan (ICL) to women with partner violence

This is joint work with Timothy Higgins, Jananie William

The aim of this thesis is to develop models for the design and costing of Income Contingent Loans (ICLs) with specific applications to women experiencing partner violence (PV). ICL is primarily used in the higher education system, offering benefits such as consumption smoothing and default protection. Our research makes several contributions to the existing literature by incorporating advanced labour force models, novel methods for projecting lifetime income and exploring the application of ICL in new domains.

In this presentation, I will discuss the expansion of ICL to women experiencing PV in Australia, with an emphasis on modelling the dynamics of labour force (LF) outcomes. 17% of Australian women have ever experienced PV in their lifetimes, and there are currently limited financial resources available to women who experience PV, highlighting the need to consider different mechanisms of financial support. I present a model for labour force dynamics and use HILDA data to conduct a comparison between two candidate models. We find that experiencing PV significantly impacts women's labour force transitions only in the short run and shows no significant effect over the long-run horizon. The presentation will conclude with a discussion on potential limitations and avenues for future research.