The Portfolio Effect of Pension Reforms
AbstractWe estimate the portfolio effect of changes in social security wealth exploiting a decade of Italian pension reforms as a source of exogenous variation. The Italian Survey of Household Income and Wealth records detailed portfolio data and elicits expectations of retirement outcomes, thus allowing us to measure the expected social security wealth and to assess to what extent Italian households perceive the innovations brought about by the reforms. We find that households have responded to the cut in pension benefits mostly by increasing real estate wealth, and that the response is stronger among households that are able to estimate more accurately future social security benefits. We also compute that for the average household consumable wealth increases by 40 percent of the reduction in social security wealth.
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Bibliographic InfoPaper provided by Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy in its series CSEF Working Papers with number 234.
Date of creation: 10 Jul 2009
Date of revision:
Pension Reform; Portfolio Choice; Retirement Saving;
Other versions of this item:
- Bottazzi, Renata & Jappelli, Tullio & Padula, Mario, 2009. "The Portfolio Effect of Pension Reforms," CEPR Discussion Papers 7380, C.E.P.R. Discussion Papers.
- Renata Bottazzi & Tullio Jappelli & Mario Padula, 2009. "The Portfolio Effect of Pension Reforms," Working Papers 2009_17, Department of Economics, University of Venice "Ca' Foscari".
- H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
- E21 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
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