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Early retirement and household financial savings
[Pension anticipée et épargne financière des ménages]

Author

Listed:
  • Luc Arrondel

    (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)

  • Jean-Brieux Delbos

    (Banque de France - Banque de France - Banque de France)

  • Dominique Durant

    (Banque de France - Banque de France - Banque de France)

  • Christian Pfister

    (Banque de France - Banque de France - Banque de France, Institut d'Études Politiques [IEP] - Paris)

  • Laurent Soulat

    (CDC - Caisse des dépôts et consignations (France))

Abstract

Since Feldstein's pioneering article (1974), the impact of a pension system on the level of savings has been the subject of numerous studies, with sometimes controversial results. According to the standard life-cycle hypothesis, someone who anticipates a loss in living standards upon retirement should, all else being equal, save more. This is the issue examined here. To this end, we consider that individuals anticipate their replacement rate (based on their wage profile) more satisfactorily than the amount of their pension at the time of retirement. We then study the effects of an anticipated variation in this replacement rate on household financial savings, taking into account both expected career changes and pension reforms. We use the 2012 wave of the PAT€R survey of the French population, which provides a wealth of information at the individual level on pension expectations. Our econometric estimates show that a lower (respectively, higher) expected replacement rate is significantly related to a higher (respectively, lower) financial savings rate.

Suggested Citation

  • Luc Arrondel & Jean-Brieux Delbos & Dominique Durant & Christian Pfister & Laurent Soulat, 2020. "Early retirement and household financial savings [Pension anticipée et épargne financière des ménages]," PSE-Ecole d'économie de Paris (Postprint) halshs-03229960, HAL.
    • Handle: RePEc:hal:pseptp:halshs-03229960
    DOI: 10.3917/reof.170.0227
    as

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