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Pension wealth and household savings in Europe: Evidence from SHARELIFE

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  • Alessie, Rob
  • Angelini, Viola
  • van Santen, Peter

Abstract

We use recently collected retrospective survey data to estimate the displacement effect of pension wealth on household savings. The third wave of the Survey of Health, Ageing and Retirement in Europe, SHARELIFE, collects information on the entire job history of the respondent, a feature missing in most previous studies. We show that addressing measurement error problems is crucial to estimate the displacement effect when using survey data. We find that each euro of pension wealth is associated with a 47 (61) cent decline in non-pension wealth using robust (median) regression. In the presence of biases from measurement errors and omitted (unobserved) variables, we estimate a lower bound to the true offset between 17% and 30%, significantly different from zero. Instrumental variables regression estimates, although less precise, suggest full displacement.

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Bibliographic Info

Article provided by Elsevier in its journal European Economic Review.

Volume (Year): 63 (2013)
Issue (Month): C ()
Pages: 308-328

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Handle: RePEc:eee:eecrev:v:63:y:2013:i:c:p:308-328

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Web page: http://www.elsevier.com/locate/eer

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Keywords: Displacement effect; Lifetime income; Retrospective survey; Measurement error;

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References

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Cited by:
  1. Aleksandra Kolasa & Barbara Liberda, 2014. "Determinants of saving in Poland: Are they different than in other OECD countries?," Working Papers 2014-13, Faculty of Economic Sciences, University of Warsaw.
  2. Luca Stella, 2013. "Intergenerational transmission of human capital in Europe: evidence from SHARE," IZA Journal of European Labor Studies, Springer, vol. 2(1), pages 1-24, December.

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