Can a "force saving" policy enhance the future happiness of the society? a survey study of the Mandatory Provident Fund (MPF) policy in Hong Kong

Abstract

Population getting aging is a problem or going to be a problem for many Asian countries. Hong Kong is expecting a rapid population aging, by 2033, it is predicted by the government that 27 percent of population will be over the usual retirement age 65. The Mandatory Provident Fund (MPF) policy was implemented in year 2000 as a retirement protection system. The core of the MPF policy is a “force saving” policy aims at enhancing future well-being or happiness. Indeed the similar “force saving” policy can be implemented for different purpose of enhancing happiness, for example reducing future poverty, financing future education or financing future health-care system. This paper employs an ordered probit model to review MPF policy from the point of view of self-reported happiness expectation after retirement. The data were collected by means of a survey conducted by “Economics and Well-being Research” in February 2007 using randomly selected telephone numbers from residential telephone directories. A total of 543 respondents were successfully interviewed. This paper intends to answer the following questions: 1) Can MPF make the people in Hong Kong having a happier retirement expectation? 2) What are some of the determinants of happiness expectation after retirement? 3) What can other countries learn from the experience of implementing the MPF in Hong Kong?