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Pension Wealth and Household Savings in Europe: Evidence from SHARELIFE

  • Alessie, Rob

    ()

    (University of Groningen and Netspar)

  • Angelini, Viola

    ()

    (University of Groningen and Netspar)

  • van Santen, Peter

    ()

    (Research Department, Central Bank of Sweden)

We use recently collected retrospective survey data to estimate the displacement effect of pension wealth on household savings. The third wave of the Survey of Health, Ageing and Retirement in Europe, SHARELIFE, collects information on the entire job history of the respondent, a feature missing in most previous studies. We show that addressing measurement error problems is crucial to estimate the displacement effect when using survey data. We find that each euro of pension wealth is associated with a 47 (61) cent decline in non–pension wealth using robust (median) regression. In the presence of biases from measurement errors and omitted (unobserved) variables, we estimate a lower bound to the true offset between 17% and 30%, significantly different from zero. Instrumental variables regression estimates, although less precise, suggest full displacement.

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File URL: http://www.riksbank.se/Documents/Rapporter/Working_papers/2013/rap_wp265_130424.pdf
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Paper provided by Sveriges Riksbank (Central Bank of Sweden) in its series Working Paper Series with number 265.

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Length: 43 pages
Date of creation: 01 Apr 2013
Date of revision:
Handle: RePEc:hhs:rbnkwp:0265
Contact details of provider: Postal: Sveriges Riksbank, SE-103 37 Stockholm, Sweden
Phone: 08 - 787 00 00
Fax: 08-21 05 31
Web page: http://www.riksbank.com/
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  8. Kapteyn, Arie & Alessie, Rob & Lusardi, Annamaria, 1999. "Explaining the wealth holdings of different cohorts : productivity growth and social security," Serie Research Memoranda 0038, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics.
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