Hostname: page-component-848d4c4894-pjpqr Total loading time: 0 Render date: 2024-06-22T10:18:38.241Z Has data issue: false hasContentIssue false
  • English
  • Français

Public pension wealth and household asset holdings: new evidence from Belgium

Published online by Cambridge University Press:  22 January 2019

Mathieu Lefebvre Open the ORCID record for Mathieu Lefebvre [Opens in a new window]  and
Sergio Perelman
Mathieu Lefebvre*
Affiliation:
BETA, University of Strasbourg, Strasbourg, France
Sergio Perelman
Affiliation:
HEC, University of Liège and CREPP, Liege, Belgium
*
*Corresponding author. Email: Mathieu.lefebvre@unistra.fr
Get access Rights & Permissions [Opens in a new window]

Abstract

It has been long suggested that public pension wealth may crowd out household savings. However, there remains controversy about the extent of this displacement effect. In this paper we use an original microsimulation model based on retrospective survey data collected through the third wave of the Survey of Health, Ageing and Retirement in Europe (SHARE) to estimate the displacement effect of public pension wealth on other wealth in Belgium. Combining this rich dataset with an accurate estimation of the individual pension entitlements allows us to circumvent some of the main measurement error problems faced by previous studies. We estimate that an extra euro of public pension wealth is associated with about 14–25 cent decline in households’ non-pension wealth.

Keywords

Displacement effectmicrosimulationpublic pension wealthsavingD91H55E21J14
Type
Article
Information
Journal of Pension Economics & Finance , Volume 19 , Issue 3 , July 2020 , pp. 309 - 322
Copyright
Copyright © Cambridge University Press 2019

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Alessie, RJM, Kapteyn, A and Klijn, F (1997) Mandatory pensions and personal savings in the Netherlands. De Economist 145, 291–324.CrossRefGoogle Scholar
Alessie, R, Angelini, V and van Santen, P (2013) Pension wealth and household savings in Europe: evidence from SHARELIFE. European Economic Review 63(C), 308–328.CrossRefGoogle Scholar
Attanasio, O and Brugiavini, A (2003) Social security and households’ saving. The Quarterly Journal of Economics 118(3), 1075–1119.CrossRefGoogle Scholar
Attanasio, O and Rohwedder, S (2003) Pension wealth and household saving: evidence from pension reforms in the United Kingdom. American Economic Review 93, 1499–1521.10.1257/000282803322655419CrossRefGoogle Scholar
Bernheim, BD (1998) Financial literacy, education, and retirement saving. In Mitchell, OS and Schieber, SJ (eds), Living with Defined Contribution Pensions. Philadelphia: University of Pennsylvania, pp. 38–68.Google Scholar
Bernheim, BD and Garrett, DM (1996) The determinants and consequences of financial education in the workplace: Evidence from a survey of households. NBER Working Paper No. 5667, Cambridge, MA.10.3386/w5667CrossRefGoogle Scholar
Blanchet, T, Dubois, Y, Marino, A and Roger, M (2016) Patrimoine privé et retraite en France. PSE Working Papers 2016-03.10.3917/rfe.161.0207CrossRefGoogle Scholar
Christelis, D (2011) Imputation of missing data in waves 1 and 2 of SHARE. SHARE Working Paper Series 01-2011.CrossRefGoogle Scholar
Dellis, A, Desmet, R, Jousten, A and Perelman, S (2004) Micro-modeling of retirement in Belgium. In Gruber, J and Wise, D (eds), Social Security Programs and Retirement Around the World: Micro-Estimation. Chicago: NBER and The University of Chicago Press, pp. 41–98.Google Scholar
Dicks-Mireaux, L and King, M (1984) Pension wealth and household savings: tests of robustness. Journal of Public Economics 23, 115–139.CrossRefGoogle Scholar
Engelhardt, G and Kumar, A (2011) Pensions and household wealth accumulation. Journal of Human Resources 46, 203–236.CrossRefGoogle Scholar
Feldstein, M (1974) Social security, induced retirement, and aggregate capital accumulation. Journal of Political Economy 82, 905–926.10.1086/260246CrossRefGoogle Scholar
Feldstein, M and Pellechio, A (1979) Social security and household wealth accumulation: new microeconometric evidence. Review of Economics and Statistics 61, 361–368.CrossRefGoogle Scholar
Gale, W (1998) The effects of pensions on household wealth: reevaluation of theory and evidence. Journal of Political Economy 106, 706–723.CrossRefGoogle Scholar
Gruber, J and Wise, D (2004) Social security programs and retirement around the World: Microestimation. University of Chicago Press and NBER.CrossRefGoogle Scholar
Gruber, J and Wise, D (2007) Social security programs and retirement around the World: Fiscal implications of reforms. University of Chicago Press and NBER.CrossRefGoogle Scholar
Haurin, DR, Hendershott, PH and Wachter, SM (1996) Wealth accumulation and housing choices of young households: an exploratory investigation. Journal of Housing Research 7(1), 33–57.Google Scholar
Hubbard, G (1986) Pension wealth and individual saving: some new evidence. Journal of Money, Credit and Banking 18, 167–178.10.2307/1992200CrossRefGoogle Scholar
Human Mortality Database (2015) University of California, Berkeley (USA), and Max Planck Institute for Demographic Research (Germany). Available at http://www.mortality.org or www.humanmortality.de (data downloaded on September 2015).Google Scholar
Hurd, M, Michaud, PC and Rohwedder, S (2012) The displacement effect of public pensions on the accumulation of financial assets. Fiscal Studies 33, 107–128.CrossRefGoogle ScholarPubMed
INASTI-RSVZ (2017) Social Security Self-employed Entrepreneurs, Brussels. Available at http://www.inasti.be/fr/pensions.Google Scholar
Jappelli, T (1995) Does social security reduce the accumulation of private wealth? Evidence from Italian survey data. Ricerche Economiche 49, 1–31.CrossRefGoogle Scholar
Jousten, A and Lefebvre, M (2013) Retirement incentives in Belgium: estimations and simulations using SHARE data. De Economist 161, 253–276.CrossRefGoogle Scholar
Jousten, A, Perelman, S, Segismondi, F and Tarantchenko, E (2012) Accrued pension rights in Belgium: micro-simulation of reforms. International Journal of Microsimulation 5, 22–39.CrossRefGoogle Scholar
Jousten, A, Lefebvre, M and Perelman, S (2016) Health status, disability, and retirement incentives in Belgium. In Wise, D (ed.) Social Security Programs and Retirement Around the World: Disability Insurance Programs and Retirement. Chicago: NBER and The University of Chicago Press, pp. 179–209.Google Scholar
Klump, R and Kim, S (2010) The effects of public pensions on private wealth: evidence on the German savings puzzle. Applied Economics 42, 917–1926.Google Scholar
Kotlikoff, L (1979) Social security and equilibrium capital intensity. The Quarterly Journal of Economics 93, 233–253.CrossRefGoogle Scholar
Lachowska, M and Myck, M (2015) The Effect of Public Pension Wealth on Saving and Expenditure. Upjohn Institute Working Paper No. 15-223.10.17848/wp15-223CrossRefGoogle Scholar
Laibson, D, Repetto, A and Tobacman, J (1998) Self-control and saving for retirement. Brookings Papers on Economic Activity 1998(1), 91–196.CrossRefGoogle Scholar
Little, R and Rubin, D (2002) Statistical Analysis with Missing Data, 2nd Edn.New York: John Wiley.CrossRefGoogle Scholar
ONP-RVP (2016) Statistiques annuelle des bénéficiaires de prestations 2016. Office Nationale des Pensions, Brussels. Available at http://www.onprvp.fgov.be/RVPONPPublications/FR/Statistics/Annual2016/FR_Statistique_2016.pdf.Google Scholar
PDOS-SDPSP (2016) Service des Pensions du Secteur Public. Rapport annuel 2015, Brussels. Available at http://pdos-sdpsp.fgov.be/fr/pdf/publications/sdpsp_rapportannuel_2015.pdf.Google Scholar
Rubin, D (1987) Multiple Imputation for Nonresponse in Surveys. New York: John Wiley.CrossRefGoogle Scholar
Solomon, LC (1975) The relation between schooling and savings behavior: an example of the indirect effects of education. In Juster, FT (ed.) Education, Income and Human Behavior. New York: McGraw-Hill, pp. 253–293.Google Scholar
Vieider, FM, Lefebvre, M, Bouchouicha, R, Chmura, T, Hakimov, R, Krawczyk, M and Martinsson, P (2015) Common components of risk and uncertainty attitudes across contexts and domains: evidence from 30 countries. Journal of the European Economic Association 13, 421–452.CrossRefGoogle Scholar
Supplementary material: PDF

Lefebvre and Perelman supplementary material

Appendix

Download Lefebvre and Perelman supplementary material(PDF)
PDF 896.8 KB