Do Mandatory Pensions Decrease Household Savings? Evidence for the Netherlands
AbstractThe Dutch mandatory pension system consists of two parts: a public pay-as-you-go part that provides a minimum income to all Dutch inhabitants over age 64; and an occupation-specific capital-funded part that provides supplementary retirement income. The goal of this paper is to test for the effect of mandatory pensions on discretionary household savings. The data are drawn from the CentER Savings Survey, which consists of a representative and a highest-income-decile sample of Dutch households. The survey contains rich information on house-hold wealth, pension rights and savings attitudes. A result of the empirical analysis is that the impact of the public part of the Dutch pension system is not well identified. The occupational pensions have a significant negative impact on savings motives with respect to old age. Concerning the effect on household wealth, evidence is mixed. Only in the highest-income-decile sample there is evidence for a significantly negative impact of occupational pensions.
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Bibliographic InfoPaper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 113.
Length: 32 pages
Date of creation: Feb 2000
Date of revision:
Publication status: published in: De Economist, 2000, 148 (5), 643-670; see IZA Reprints 63/99
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Find related papers by JEL classification:
- C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
- D91 - Microeconomics - - Intertemporal Choice and Growth - - - Intertemporal Consumer Choice; Life Cycle Models and Saving
- H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
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- NEP-ALL-2000-10-23 (All new papers)
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