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Pension Wealth and Household Savings: Tests of Robustness

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  • Louis Dicks-Mireaux
  • Mervyn A. King

Abstract

A substantial literature exists on the impact of pension schemes, both public and private, on the level of household saving. Yet there is no clear consensus on the impact of pensions on private saving. In this paper we show how beliefs about this displacement effect are modified by prior beliefs both about variables which ntight be relevant in an equation for private savings and about the magnitude of the displacement effect. Using data for 8,279 Canadian households, and estimates of pension wealth (both private and social security) which we construct for each household in the sample, the estimated displacement effects are found to be relatively robust with respect to both types of prior belief.

Suggested Citation

  • Louis Dicks-Mireaux & Mervyn A. King, 1982. "Pension Wealth and Household Savings: Tests of Robustness," NBER Working Papers 0962, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:0962
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    3. Feldstein, Martin & Liebman, Jeffrey B., 2002. "Social security," Handbook of Public Economics,in: A. J. Auerbach & M. Feldstein (ed.), Handbook of Public Economics, edition 1, volume 4, chapter 32, pages 2245-2324 Elsevier.
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    6. Philip Cagan, 1965. "The Effect of Pension Plans on Aggregate Saving: Evidence from a Sample Survey," NBER Books, National Bureau of Economic Research, Inc, number caga65-2, June.
    7. Diamond, P. A. & Hausman, J. A., 1984. "Individual retirement and savings behavior," Journal of Public Economics, Elsevier, vol. 23(1-2), pages 81-114.
    8. Mervyn A. King & Louis Dicks-Mireaux, 1981. "Asset Holdings and the Life Cycle," NBER Working Papers 0614, National Bureau of Economic Research, Inc.
    9. Cooley, Thomas F & LeRoy, Stephen F, 1981. "Identification and Estimation of Money Demand," American Economic Review, American Economic Association, vol. 71(5), pages 825-844, December.
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    11. Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 31(3), pages 129-137.
    12. Martin Feldstein & Anthony J. Pellechio, 1980. "Social Security and Household Wealth Accumulation: New Microeconomic Evidence," NBER Working Papers 0206, National Bureau of Economic Research, Inc.
    13. Kotlikoff, Laurence J, 1979. "Testing the Theory of Social Security and Life Cycle Accumulation," American Economic Review, American Economic Association, vol. 69(3), pages 396-410, June.
    14. Greene, William H, 1981. "Sample Selection Bias as a Specification Error: Comment," Econometrica, Econometric Society, vol. 49(3), pages 795-798, May.
    15. Munnell, Alicia H, 1976. "Private Pensions and Saving: New Evidence," Journal of Political Economy, University of Chicago Press, vol. 84(5), pages 1013-1032, October.
    16. King, M A & Dicks-Mireaux, L-D L, 1982. "Asset Holdings and the Life-Cycle," Economic Journal, Royal Economic Society, vol. 92(366), pages 247-267, June.
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