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The effects of pension-related policies on household spending

Author

Listed:
  • Susana Párraga Rodríguez

    (Banco de España)

Abstract

This paper estimates the impact of pension-related policies on household spending. The identification strategy exploits the deviation in pensioner income and expenditure caused by the introduction of a new pension system during the 1980s and 1990s in Spain and constructs a new narrative series of legislated pension changes. I present a variety of estimates, some of them imply that increases in the average pension have a roughly one-for-one effect on pensioner spending. The strongest effects are on the pensioners with the highest levels of expenditure, income, and wealth. Estimates for different categories of expenditure indicate that benefit increases trigger these pensioners to spend more on durables. At the same time, pension-related policies targeted to pensioners with low income levels seem to affect the spending on non-durables and necessities such as food positively.

Suggested Citation

  • Susana Párraga Rodríguez, 2019. "The effects of pension-related policies on household spending," Working Papers 1913, Banco de España.
    • Handle: RePEc:bde:wpaper:1913
    as

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    File URL: https://www.bde.es/f/webbde/SES/Secciones/Publicaciones/PublicacionesSeriadas/DocumentosTrabajo/19/Fich/dt1913e.pdf
    File Function: First version, May 2019
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    References listed on IDEAS

    as
    1. Olympia Bover & Laura Hospido & Ernesto Villanueva, 2019. "The survey of financial competences (ECF): description and methods of the 2016 wave," Occasional Papers 1909, Banco de España.
    2. Olympia Bover & Enrique Coronado & Pilar Velilla, 2014. "The Spanish survey of household finances (EFF): description and methods of the 2011 wave," Occasional Papers 1407, Banco de España.
    3. José de Sousa & Julie Lochard, 2011. "Does the Single Currency Affect Foreign Direct Investment?," Scandinavian Journal of Economics, Wiley Blackwell, vol. 113(3), pages 553-578, September.
    4. Olympia Bover & Laura Crespo & Carlos Gento & Ismael Moreno, 2018. "The Spanish survey of household finances (EFF): Description and methods of the 2014 wave," Occasional Papers 1804, Banco de España.
    5. Olympia Bover, 2011. "The Spanish survey of household finances (eff): description and methods of the 2008 wave," Occasional Papers 1103, Banco de España.
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    More about this item

    Keywords

    fiscal policy; narrative public pensions changes; household expenditure;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • N14 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Europe: 1913-

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