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Why do people invest in personal pension plans?

Author

Listed:
  • Felix Dominguez-Barrero
  • Julio Lopez-Laborda

Abstract

The aim of this article is to identify the variables affecting the decision to make contributions to personal pension plans and the amount of such contributions. For this purpose, we specify and estimate a Tobit model for a sample based on the 1995 Personal Income Taxpayers Panel prepared by the Institute of Fiscal Studies (Spanish Ministry of Economy and Finance) formed by 3041 taxpayers, of whom 358 made contributions to pension plans. Our results suggest that individuals decide to invest in pension plans on complex grounds combining the wish to benefit from tax savings and to ensure they will receive supplementary income upon retirement.

Suggested Citation

  • Felix Dominguez-Barrero & Julio Lopez-Laborda, 2007. "Why do people invest in personal pension plans?," Applied Economics, Taylor & Francis Journals, vol. 39(9), pages 1115-1126.
    • Handle: RePEc:taf:applec:v:39:y:2007:i:9:p:1115-1126
    DOI: 10.1080/00036840500461956
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    References listed on IDEAS

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    1. David Blake, 2004. "Modelling the composition of personal sector wealth in the UK," Applied Financial Economics, Taylor & Francis Journals, vol. 14(9), pages 611-630.
    2. David Bernstein, 2002. "Fringe benefits and small businesses: evidence from the federal reserve board small business survey," Applied Economics, Taylor & Francis Journals, vol. 34(16), pages 2063-2067.
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    Cited by:

    1. George Mihaylov & Alfred Yawson & Ralf Zurbruegg, 2015. "The decision to seek advice in the self-directed retirement fund industry," Applied Economics, Taylor & Francis Journals, vol. 47(32), pages 3367-3381, July.
    2. Kathrin Dummann, 2007. "What Determines the Demand for Occupational Pensions in Germany?," SOEPpapers on Multidisciplinary Panel Data Research 67, DIW Berlin, The German Socio-Economic Panel (SOEP).
    3. Martí Ballester, Carmen Pilar, 2013. "Determinants of equity pension plan flows," Economics Discussion Papers 2013-15, Kiel Institute for the World Economy (IfW Kiel).
    4. Carmen Pilar Martí Ballester, 2014. "Determinants of equity pension plan flows," Estudios de Economia, University of Chile, Department of Economics, vol. 41(1 Year 20), pages 125-148, June.

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