The third pillar in Europe: institutional factors and individual decisions
AbstractThis paper studies and documents household participation in voluntary individual retirement accounts (IRAs) in eleven European countries. Using recently available, internationally comparable data of households aged 50+, we calculate country-by-country average marginal effects of the probability to save in IRAs. We link the evidence from the micro data to the institutional differences in pension systems that prevail across the countries in our sample. Our results indicate that households' participation in the 'third pillar' varies substantially across countries, both due to institutional differences and household characteristics. Higher education is crucial for participation in countries with shorter traditions of IRAs where awareness matters most. Background risk due to expectations of future pension reforms as well as experience with occupational pensions increase voluntary retirement savings additionally for the currently employed individuals in our sample. --
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Bibliographic InfoPaper provided by Deutsche Bundesbank, Research Centre in its series Discussion Paper Series 1: Economic Studies with number 2011,09.
Date of creation: 2011
Date of revision:
individual retirement accounts; pension reform; consumption and saving over the life-cycle;
Find related papers by JEL classification:
- D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
- G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
- J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
This paper has been announced in the following NEP Reports:
- NEP-AGE-2011-05-24 (Economics of Ageing)
- NEP-ALL-2011-05-24 (All new papers)
- NEP-EUR-2011-05-24 (Microeconomic European Issues)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Maarten van Rooij & Clemens Kool & Henri�tte Prast, 2005.
"Risk-return preferences in the pension domain: are people able to choose?,"
DNB Working Papers, Netherlands Central Bank, Research Department
025, Netherlands Central Bank, Research Department.
- van Rooij, Maarten C.J. & Kool, Clemens J.M. & Prast, Henriette M., 2007. "Risk-return preferences in the pension domain: Are people able to choose?," Journal of Public Economics, Elsevier, Elsevier, vol. 91(3-4), pages 701-722, April.
- M.C.J. van Rooij & C.J.M. Kool & H.M. Prast, 2005. "Risk-return preferences in the pension domain: are people able to choose?," Working Papers, Utrecht School of Economics 05-04, Utrecht School of Economics.
- Rooij, M.C.J. van & Kool, C.J.M. & Prast, H.M., 2007. "Risk-return preferences in the pension domain: Are people able to choose?," Open Access publications from Tilburg University, Tilburg University urn:nbn:nl:ui:12-381463, Tilburg University.
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