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Pension Entitlements and Wealth Accumulation

Author

Listed:
  • Hernæs, Erik

    (Ragnar Frisch Centre of Economic Research)

  • Zhu, Weizhen

    (Ragnar Frisch Centre of Economic Research)

Abstract

Variation in non-pension wealth accumulation with the level of expected pensions is investigated with a register based, linked employer-employee dataset. This includes wealth components, earnings history and demographic information, supplemented with detailed calculations of public and occupational pension entitlements, allowing construction of full life time income trajectories. Regressions are run on the half of the population with some wealth and therefore the option of consumption smoothing. The results imply substantial offsets of pension wealth against other private wealth, mostly financial. Although pension benefits are related to earnings, the regressive structure of the public pension and incomplete coverage of occupational pensions provide independent variation in pensions. Panel estimation provides support for the cross section results. Heterogeneity and selection bias are investigated with estimation on a variety of sub-samples.

Suggested Citation

  • Hernæs, Erik & Zhu, Weizhen, 2009. "Pension Entitlements and Wealth Accumulation," Memorandum 12/2007, Oslo University, Department of Economics.
    • Handle: RePEc:hhs:osloec:2007_012
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    File URL: http://www.sv.uio.no/econ/english/research/unpublished-works/working-papers/pdf-files/2007/Memo-12-2007.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    Wealth accumulation; Pensions;

    JEL classification:

    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making

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