Retirement expectations, pension reforms, and their impact on private wealth accumulation

Bottazzi, Renata; Jappelli, Tullio; Padula, Mario

doi:10.1016/j.jpubeco.2006.03.005

“…Attanasio and Rohwedder (2003), Attanasio and Brugiavini (2003), Bottazzi, Jappelli, and Padula (2006), Aguila (2011), Feng, He, andSato (2011), and Banerjee (2011) use differential impacts across groups and time created by pension reforms as a source of variation in pension wealth and apply variants of the difference-in-differences approach to estimate the crowd-out effect. Whereas Attanasio and Rohwedder (2003), Attanasio and Brugiavini (2003), Bottazzi, Jappelli, and Padula (2006), and Aguila (2011) find crowd-out effects ranging between 0.50 and 0.75, Feng, He, and Sato (2011) report modest crowd-out, ranging between 0.10 and 0.16. 4 In sum, the literature relying on quasi-experimental variation, too, remains in dispute about the magnitude of public pension crowd-out.…”

Section: 3mentioning

confidence: 99%

“…Gale (1998) proposes to use instead the so-called "Gale's Q" adjustment factor (see Bottazzi, Jappelli, and Padula [2006]; Engelhardt and Kumar [2011]; and Alessie, Angelini, and van Santen [2013]), which is a function of the subjective discount rate, the point in the life cycle when an individual is observed, and the point in the life cycle when a change in the expected pension benefits takes place.…”

Section: Appendix B: Adjustment Factormentioning

confidence: 99%

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The Effect of Public Pension Wealth on Saving and Expenditure

Lachowska

¹

,

Myck

²

2018

American Economic Journal: Economic Policy

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. www.econstor.eu Terms of use: Documents in D I S C U S S I O N P A P E R S E R I E S ABSTRACTThe Effect of Public Pension Wealth on Saving and Expenditure *In order to study whether public pension systems displace private saving, we use the quasiexperimental variation in pension wealth created by Poland's 1999 pension reform. Using the 1997-2003 Polish Household Budget Surveys, we begin by estimating "difference-indifferences" regressions, where we compare household saving and expenditure across time and between cohorts affected and unaffected by the reform. Next, we estimate the extent of crowd-out by using two-stage least squares. We identify the effect of pension wealth on private saving by using the cohort-by-time variation in pension wealth that is explained by the reform. We find that one additional Polish zloty, or PLN, of pension wealth crowds out about 0.24 PLN in household saving. We also find heterogeneity in responses. For the middle-aged cohorts, we find a large public pension crowd-out of private saving (about 0.54 PLN of private saving for each 1 PLN of public pension wealth), while the crowd-out for younger cohorts equals about 0.30 PLN of private saving per 1 PLN. Finally, we find a close-to-complete crowd-out among highly-educated households.JEL Classification: E21, H55, I38, P35

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“…For instance, whereas prior to 1992, the 20-year accumulated contribution rule allowed many public sector workers to retire in their 40s or early 50s, since then several pension reforms have gradually increased the number of years of contributions required for seniority-based retirement, and raised the minimum age required for age-based retirement to 65. These pension eligibility rules, which vary over time and according to such factors as gender and employment sector, provide an arguably exogenous variation (see also, Bottazzi et al 2006;Battistin et al 2009Battistin et al , 2015Aparicio-Fenoll and Vidal-Fernandez 2015) used in this paper to identify the effect of grandparental childcare availability on maternal employment.…”

Section: Introductionmentioning

confidence: 99%

Grandparental availability for child care and maternal labor force participation: pension reform evidence from Italy

Bratti

¹

,

Frattini

²

,

Scervini

³

2017

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In this paper, we exploit pension reform-induced changes in retirement eligibility requirements to assess the role of grandparental childcare availability in the labor force participation of women with children under 15. Our analysis shows that, among the women studied, those whose own mothers are retirement eligible have a 11% higher probability of being in the labor force than those whose mothers are ineligible. The pension eligibility of maternal grandfathers and paternal grandparents, however, has no significant effect on the women's labor force participation. We also demonstrate that the eligibility of maternal grandmothers mainly captures the effect of their availability for childcare. Hence, pension reforms, by potentially robbing households of an J Popul Econ https://doi.org/10.1007/s00148-017-0683-7

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“…A vast literature examines the interplay between pension wealth, household savings, and wealth accumulation (i.e. Dicks-Mireaux 1984, Gustman and Steinmeier 1999, Bottazzi et al 2006. Further, subsidization schemes for private retirement savings might affect peoples' savings decisions, both the savings levels and the composition of portfolios.…”

mentioning

confidence: 99%

The Joint Distribution of Net Worth and Pension Wealth in Germany

Boenke

¹

,

Grabka

²

,

Schröder

³

et al. 2016

SSRN Journal

2

0

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in SOEPpapers on Multidisciplinary Panel Data Research at DIW BerlinThis series presents research findings based either directly on data from the German SocioEconomic Panel study (SOEP) or using SOEP data as part of an internationally comparable data set (e.g. CNEF, ECHP, LIS, LWS, CHER/PACO). SOEP is a truly multidisciplinary household panel study covering a wide range of social and behavioral sciences: economics, sociology, psychology, survey methodology, econometrics and applied statistics, educational science, political science, public health, behavioral genetics, demography, geography, and sport science.The decision to publish a submission in SOEPpapers is made by a board of editors chosen by the DIW Berlin to represent the wide range of disciplines covered by SOEP. There is no external referee process and papers are either accepted or rejected without revision. Papers appear in this series as works in progress and may also appear elsewhere. They often represent preliminary studies and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be requested from the author directly.Any opinions expressed in this series are those of the author(s) and not those of DIW Berlin.Research disseminated by DIW Berlin may include views on public policy issues, but the institute itself takes no institutional policy positions. Abstract. Research on wealth inequality usually focuses on real and financial assets, while pension wealth -the present value of future pension entitlements from public and company pension schemes -receives little attention. This is astonishing, given that pension plans play an important role for material security and well-being for an overwhelming part of the population and, thus, should be accounted for in peoples' wealth portfolios. Using novel data from the Socio Economic Panel (SOEP), we show the incidence, relevance, and distribution of individual pension wealth, net worth, and augmented wealth (the sum of the two) in Germany. Further, we investigate age-wealth-profiles and differences between East and West Germany.JEL codes: D31, H55, J32

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Retirement expectations, pension reforms, and their impact on private wealth accumulation

Cited by 176 publications

References 17 publications

The Effect of Public Pension Wealth on Saving and Expenditure

The Effect of Public Pension Wealth on Saving and Expenditure

Grandparental availability for child care and maternal labor force participation: pension reform evidence from Italy

The Joint Distribution of Net Worth and Pension Wealth in Germany

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