Voluntary Contributions to Personal Pension Plans: Evidence from the British Household Panel Survey
AbstractIn this paper, we use data from the British Household Panel Survey (BHPS) for the years 1992 to 1998 to study the determinants of saving in the form of voluntary contributions to personal pension plans (PPPs). We first estimate a probit model with selection for the probability of making these voluntary contributions. We then estimate a random-effects tobit regression for the amounts contributed and compare the results with those of a similar regression for conventional saving. Our findings suggest that voluntary contributions to PPPs are made essentially for retirement purposes, whereas conventional saving is undertaken for precautionary motives. The former type of saving is thus unlikely to offset the latter completely.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Institute for Fiscal Studies in its journal Fiscal Studies.
Volume (Year): 21 (2000)
Issue (Month): 4 (December)
Contact details of provider:
Postal: The Institute for Fiscal Studies 7 Ridgmount Street LONDON WC1E 7AE
Phone: (+44) 020 7291 4800
Fax: (+44) 020 7323 4780
Web page: http://www.ifs.org.uk
More information through EDIRC
Postal: The Institute for Fiscal Studies 7 Ridgmount Street LONDON WC1E 7AE
Find related papers by JEL classification:
- D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
- D91 - Microeconomics - - Intertemporal Choice - - - Intertemporal Household Choice; Life Cycle Models and Saving
- E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
- I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
- J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Miles, David, 1997. "A Household Level Study of the Determinants of Incomes and Consumption," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 107(440), pages 1-25, January.
- Armando Barrientos, 1998. "Supplementary pension coverage in Britain," Fiscal Studies, Institute for Fiscal Studies, Institute for Fiscal Studies, vol. 19(4), pages 429-446, November.
- Alessie, Rob & Lusardi, Annamaria, 1997. "Saving and income smoothing: Evidence from panel data," European Economic Review, Elsevier, Elsevier, vol. 41(7), pages 1251-1279, July.
- Eric M. Engen & William G. Gale & John Karl Scholz, 1996. "The Illusory Effects of Saving Incentives on Saving," Journal of Economic Perspectives, American Economic Association, American Economic Association, vol. 10(4), pages 113-138, Fall.
- Carl Emmerson & Sarah Tanner, 2000. "A note on the tax treatment of private pensions and Individual Savings Accounts," Fiscal Studies, Institute for Fiscal Studies, Institute for Fiscal Studies, vol. 21(1), pages 65-74, March.
- James Banks & Richard Blundell & Agar Brugiavini, 1999.
"Risk pooling, precautionary saving and consumption growth,"
IFS Working Papers, Institute for Fiscal Studies
W99/19, Institute for Fiscal Studies.
- Banks, James & Blundell, Richard & Brugiavini, Agar, 2001. "Risk Pooling, Precautionary Saving and Consumption Growth," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 68(4), pages 757-79, October.
- Verbeek, M. & Nijman, T., 1990.
"Testing For Selectivity Bias In Panel Data Models,"
Papers, Tilburg - Center for Economic Research
9018, Tilburg - Center for Economic Research.
- Verbeek, Marno & Nijman, Theo, 1992. "Testing for Selectivity Bias in Panel Data Models," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 33(3), pages 681-703, August.
- Verbeek, M.J.C.M. & Nijman, T.E., 1990. "Testing for selectivity bias in panel data models," Discussion Paper, Tilburg University, Center for Economic Research 1990-18, Tilburg University, Center for Economic Research.
- Christopher D Carroll & Karen E Dynan & Spencer D Krane, 1999.
"Unemployment Risk and Precautionary Wealth: Evidence from Households' Balance Sheets,"
Economics Working Paper Archive, The Johns Hopkins University,Department of Economics
416, The Johns Hopkins University,Department of Economics.
- Christopher D. Carroll & Karen E. Dynan & Spencer D. Krane, 2003. "Unemployment Risk and Precautionary Wealth: Evidence from Households' Balance Sheets," The Review of Economics and Statistics, MIT Press, vol. 85(3), pages 586-604, August.
- Christopher D. Carroll & Karen E. Dynan & Spencer D. Krane, 1999. "Unemployment risk and precautionary wealth: evidence from households' balance sheets," Finance and Economics Discussion Series, Board of Governors of the Federal Reserve System (U.S.) 1999-15, Board of Governors of the Federal Reserve System (U.S.).
- Nijman, T.E. & Verbeek, M.J.C.M., 1992. "Testing for selectivity in panel data models," Open Access publications from Tilburg University urn:nbn:nl:ui:12-153280, Tilburg University.
- Andrew A. Samwick, 1997.
"Discount Rate Heterogeneity and Social Security Reform,"
NBER Working Papers
6219, National Bureau of Economic Research, Inc.
- Samwick, Andrew A., 1998. "Discount rate heterogeneity and social security reform," Journal of Development Economics, Elsevier, Elsevier, vol. 57(1), pages 117-146, October.
- James M. Poterba & Steven F. Venti & David A. Wise, 1993.
"Do 401(k) Contributions Crowd Out Other Persoanl Saving?,"
NBER Working Papers
4391, National Bureau of Economic Research, Inc.
- Poterba, James M. & Venti, Steven F. & Wise, David A., 1995. "Do 401(k) contributions crowd out other personal saving?," Journal of Public Economics, Elsevier, Elsevier, vol. 58(1), pages 1-32, September.
- Blake, David, 2003. "Pension Schemes and Pension Funds in the United Kingdom," OUP Catalogue, Oxford University Press, Oxford University Press, edition 2, number 9780199243532, October.
- Lusardi, Annamaria, 1998. "On the Importance of the Precautionary Saving Motive," American Economic Review, American Economic Association, American Economic Association, vol. 88(2), pages 449-53, May.
- Dilnot, Andrew & Disney, Richard & Johnson, Paul & Whitehouse, Edward, 1994. "Pensions policy in the UK: An economic analysis," MPRA Paper 10478, University Library of Munich, Germany.
- Merrigan, Philip & Normandin, Michel, 1996.
"Precautionary Saving Motives: An Assessment from UK Time Series of Cross-Sections,"
Economic Journal, Royal Economic Society,
Royal Economic Society, vol. 106(438), pages 1193-1208, September.
- Philip Merrigan & Michel Normandin, 1994. "Precautionary Saving Motives: An Assessment from U.K. Time Series of Cross-Sections," Cahiers de recherche CREFE / CREFE Working Papers, CREFE, UniversitÃ© du QuÃ©bec Ã MontrÃ©al 29, CREFE, UniversitÃ© du QuÃ©bec Ã MontrÃ©al.
- William G. Gale, 1998. "The Effects of Pensions on Household Wealth: A Reevaluation of Theory and Evidence," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 106(4), pages 706-723, August.
- David I. Laibson & Andrea Repetto & Jeremy Tobacman, 1998. "Self-Control and Saving for Retirement," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 29(1), pages 91-196.
- Boozer, Michael A., 1997. "Econometric Analysis of Panel Data Badi H. Baltagi Wiley, 1995," Econometric Theory, Cambridge University Press, Cambridge University Press, vol. 13(05), pages 747-754, October.
- Van de Ven, Wynand P. M. M. & Van Praag, Bernard M. S., 1981. "The demand for deductibles in private health insurance : A probit model with sample selection," Journal of Econometrics, Elsevier, Elsevier, vol. 17(2), pages 229-252, November.
- Renuka Sane & Susan Thomas, 2013. "In search of inclusion: informal sector participation in a voluntary, defined contribution pension system," Indira Gandhi Institute of Development Research, Mumbai Working Papers 2013-022, Indira Gandhi Institute of Development Research, Mumbai, India.
- Kathrin Dummann, 2007. "What Determines the Demand for Occupational Pensions in Germany?," SOEPpapers on Multidisciplinary Panel Data Research 67, DIW Berlin, The German Socio-Economic Panel (SOEP).
- van der Wiel, Karen, 2008. "Preparing for Policy Changes: Social Security Expectations and Pension Scheme Participation," IZA Discussion Papers 3623, Institute for the Study of Labor (IZA).
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Stephanie Seavers).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.