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Does homeownership partly explain low participation in supplementary pension schemes?

Author

Listed:
  • Marco Santantonio
  • Costanza Torricelli
  • Maria Cesira Urzì Brancati

Abstract

We used nine waves of the Bank of Italy’s Survey on Household income and Wealth (1995-2012) to investigate a possible trade-off between homeownership and individual participation in a supplementary pension scheme. Italy lends itself to this type of investigation because the Italian public pension system has been heavily reformed in the period, providing in principle incentives for participation, and the homeownership rate is very high. The impact of homeownership is captured in two ways: by a dummy for being homeowner and by an index defined as the share of housing wealth over total wealth. Our results show that indeed, after controlling for a vast array of socio-economic characteristics and allowing for unobserved individual heterogeneity, both measures of homeownership are negatively associated with participation in supplementary pension schemes and that such an effect does not disappear even after the 2007 reform.

Suggested Citation

  • Marco Santantonio & Costanza Torricelli & Maria Cesira Urzì Brancati, 2014. "Does homeownership partly explain low participation in supplementary pension schemes?," Centro Studi di Banca e Finanza (CEFIN) (Center for Studies in Banking and Finance) 0048, Universita di Modena e Reggio Emilia, Dipartimento di Economia "Marco Biagi".
    • Handle: RePEc:mod:wcefin:0048
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    More about this item

    Keywords

    pension plan participation; retirement planning; housing investment;
    All these keywords.

    JEL classification:

    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions

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