Horizontalidad y democracia directa

In the linear regression model used in this chapter, the outcome variable is the overall wellbeing index computed as a continuous variable. The predictor variables are the same set of twelve variables used in Chapter Five (pension income, total income, sex, age, marital status, number of children, household size, number of dependants, number of other household members earning income, number of years worked before retirement, position held prior to retirement, and highest level of education) and divided into financial and non-financial variables. All continuous variables were standardized (pension income, total income, age, number of children, household size, number of other household members earning income, and number of years worked prior to retirement). Thus model 3 is expressed as follows:

Yw=(ßo+ß1x1+ß2x2+ß3x3+…….ßnxn)+e, where

Yw = Overall wellbeing

ß1x1 = Co-efficient of first predictor variable x1 ß2x2 = Co-efficient of second predictor variable x2 ß3x3 = Co-efficient of third predictor variable x3 ßnxn= Co-efficient of nth predictor variable xn

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Table 7.1 shows the results of the multiple linear regression analysis. The model summary shows that the model explains about half (47%) of the change in the overall wellbeing (R2). A close examination of the coefficients associated with each of the independent variables reveals that financial factors (pension income and total income) have higher coefficients than all the significant non-financial factors. Both have positive coefficients. However, pension income has the highest coefficient of .399, which means that one standard deviation increase in pension income results in two-fifths of a standard deviation increase in overall wellbeing. Total income on the other hand has a coefficient of .161, meaning that one standard deviation change in total income leads to about one-fifth of a standard deviation increase in overall wellbeing. These findings support the argument by Diener and Biswas-Diener (2002) that money provides a means by which basic needs for wellbeing are met. A recent study by Fadila and Alam (2016) on adjustment in retirement in Egypt also concluded that financial resources, among other factors, are associated with better adjustment in retirement and by extension, better wellbeing. In their view, the retirement experience involves stresses in the physical, social, and mental lives of retirees that must be managed or coped with. Monetary resources tend to increase retirees’ ability to do so. It is this ability to be that Sen describes as capability, which when converted to actual being, is described as functioning and, in this case, wellbeing.

In the qualitative analysis in Chapter Six, the contribution of money to the realization of desired wellbeing in various dimensions of wellbeing was noted. With regards to overall wellbeing, a similar observation is made from the interviews because interviewees generally held the view that money facilitated many of the things they do to ensure high wellbeing. An interviewee explained the importance of money to the attainment of desired wellbeing when he said;

I will say that when you have enough money, it helps a lot because you will be able to do all the things you need to do to live well. It is when you don’t have enough that life can be difficult for you because you can’t afford many things. When you are a pensioner and you are poor, it’s very sad. Some people die soon after retirement because they are not able to afford many things to make living better for them (Peter Dogbe, low income).

It is obvious from the above quote that higher pension expands options available for improving overall wellbeing in retirement because of ease of greater access to essential wellbeing services.

Total income on the other hand recorded a lower coefficient of .166, but higher than any of the non-financial factors. This means a standard deviation change in total income increases overall wellbeing by close to one-fifth of a standard deviation. Given that pension income plus other

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income make up total income, this finding suggests marginal gains from extra income, but not [as much] to the same extentas pension income.

All the significant non-financial factors recorded lower coefficients, ranging from .030 for highest education attained to .155 for number of years worked before retirement. Of the seven non-financial factors, classified as demographic, only one (number of household members earning income) is significantly associated with overall wellbeing (coefficient .126). All three other non-financial factors, classified as skills/experience (number of years worked, position held prior to retirement, and highest level of education attained) are significantly associated with overall wellbeing (p<0.05). Even though financial factors recorded higher coefficients, compared to non-financial factors, they also recorded higher standard errors. This means that individual values for financial factors are more dispersed than non-financial factors. This was expected because most of the non-financial factors are categorical. Those that were continuous had lesser error range.

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Table 7.1: Output of regression analysis showing standardized coefficients and standard deviations (Yw=[ßo+ß1x1+ß2x2+ß3x3+…….ßnxn]+e)

Capabilities (independent variables)

Overall wellbeing (Model 3)

Coef. ß Std. E

Financial factors

Income (Pension income) .399*** .059

Total income (pension +other income) .161* .059

Non-financial factors Demographic:

Sex – Ref: female -.022 .032

Age -.021 .029

Marital status – Ref: in a relationship -.025 .033

Number of children .077 .032

Household size -093 .036

No. of dependants -.027 .033

No. of household members earning income .126** .031

Skills/Experience:

Number of years worked before retirement .155*** .030

Position held prior to retirement .096* .033

Highest education attained – Ref: Basic education .030** .033

Constant 1.487E-15 .029

R-Squared .465

Adjusted R-Squared .445

Sample size (N) 330

Source: Author’s fieldwork, 2015 ***p>0.001 **p>0.01 *p>0.05

Education has positive coefficient in its association with overall wellbeing (.30). Thus, higher level of education increases overall wellbeing by equipping people with knowledge and skills for successful living and encouraging others to do the same (White, 2007). This confirms the finding by Amaike (2014) in Nigeria that retirees with at least secondary education experience better wellbeing than their counterparts with less than secondary education.

To test this further, the multiple linear regression model 3 was re-run to estimate the Akaike Information Criterion (AIC) at two levels. The first included all the twelve independent variables (both financial and non-financial) and the second included only the non-financial factors. The estimated AIC values for the two models were then compared. The first rule of thumb is that lower AIC is preferred to a higher AIC. The second is that in comparing the AIC of different models, a difference of five (5) or more means that the model with the smaller AIC

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is the best fit for explaining the change in outcome variable (Tan and Biswas, 2012). The calculated AIC values for the two models are summarized in Table 7.2.

Table 7.2: Estimating AIC values using linear regression models

Model

Akaike Information Criterion (AIC) 1. Full model, includes all predictor variables 520.658

2. Includes only non-financial factors 649.979

From the above, the first estimation, which contains the full list of predictor variables, has a lower AIC (520.658 for model 1 against 649.979 for model 2). The first estimation therefore better explains the change in the dependent variable (overall wellbeing) than the second estimation. The difference between the two estimations is also more than five (5), meaning that the first model has a better explanatory power than the second model. Thus, the inclusion of financial factors in the first model enhances the model in explaining the overall wellbeing.

The potential effect of pension income on retirement wellbeing stems from the fact that it makes resources available to be invested in activities that enhance overall wellbeing (Esser and Palme, 2010). It is therefore not surprising that the lack of pension income is regarded by some interviewees in phase 2 of the study, as the most challenging situation in retirement because, to them, virtually everything depends on money. They use money to pay for their health needs, pay rent or make repairs to their houses, buy food, and honour financial obligations to family and community, if any. Responding to a question on what his major challenge is in retirement, an interviewee noted that:

The most challenging thing in retirement is the monetary aspect because if you were earning about 200 Ghana Cedis and now you are retired and receiving about a tenth of that, it makes life difficult. The money you receive as pension is not adequate to meet your needs. You cannot do the things you wish to do to live a good life (Kofi Amevor, low income).

This is not just the case with low income earning interviewees. Some high income earning interviewees also expressed similar sentiments. Yaw Adjei for instance expressed worry about his inability to support his family due to limited income in retirement and having to also pay for his son’s education at university. The inability to honour financial obligations to the

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extended family threatens their self-esteem, which can have a negative impact on their wellbeing.

When I was working, every December I sent a package to my old ladies within the family. Unfortunately, last year I couldn’t because my finance couldn’t support and I was so sad because they are my old ladies (Yaw Adjei, high income)

Some high income retirees who also have additional sources of income are better able to cope with this situation. Tei Armah for example feels financially independent, has adult working children who are independent, receives interests on his investments regularly, lives in his own house, which he regularly maintains, financially supports his mother who is still alive as well as his sister, and still continues to save/invest money. Having planned well towards retirement, he is focused on maintaining high wellbeing. He stated that:

I try as much as possible to manage any money that comes into my hands well so that at the end of the day, there will always be something left to support anybody that comes to me for assistance. And if possible, increase the investments I have (Tei Armah, high income).

Some low income interviewees who are professionals actually supplement their pension income with income from post retirement work. Daniel Adadevor for instance is a retired teacher, but continues to work as a teacher in a private school, and Emmanuel Akoto retired from the Ghana Health Services (GES) as a psychiatric nurse but has taken up a job with a private clinic. He thus supplements his pension income with income from retirement work: “By

the grace of God because of the pension they pay me and because I am also working, I am able to provide for the house. So I manage. My wife also does some petty trading (high income).

Kofi Amevor sums up the importance of financial resourcefulness rather hilariously when he equated money with happiness. He notes that:

A poor man cannot be happy. You see, even if you get small money, that makes you happy. That is why the proverb says, happy yourself. No one can make you happy. If the money is there, you can do whatever you feel is good for you. Assuming people come to me and I am able to provide what they want, will they not be happy? They will be very happy. However, if they come here and I am not able to get them the money they need, it is not good enough. (Kofi Amevor, low income).

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These quotes buttress the importance of having adequate money in retirement to cater for wellbeing and confirm previous findings by Apt (1992) and Darkwa (2000). While Apt found that having financial support is an important predictor of life satisfaction among the elderly population in Ghana, Darkwa found that economic insecurity is the biggest challenge and concern of the elderly population. However, Graham and Pettinato (2002) explain that the effect of income on wellbeing among older people with lower income is greater than on those with higher income. Thus, previous studies and the present study show that economic security in retirement is a necessary condition for achieving a desired standard of overall wellbeing, although other non-economic factors also contribute, to which we now turn.