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The effect of pension wealth on private savings. Results from an extended life cycle model

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Abstract

An extended life cycle model is used to investigate how variation in the level of expected pensions influences non-pension wealth accumulation. We try to explain why the offset effects between pension wealth and private savings are not one to one by accounting for different risks and market imperfections, which includes uninsured risk on earnings, mortality risk, borrowing constraints and bequest motive. The model is calibrated on Norwegian household data from 1992 to 2005. Based on the calibrated model, simulations are performed to explore consequences of introducing these factors. The result shows that by simply accounting these risks and constraints, we can explain most of the departure between empirical findings and theoretical prediction.

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  • Zhiyang Jia & Weizhen Zhu, 2012. "The effect of pension wealth on private savings. Results from an extended life cycle model," Discussion Papers 697, Statistics Norway, Research Department.
    • Handle: RePEc:ssb:dispap:697
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    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. [経済]年金と貯蓄が完全な代替とならない理由
      by himaginary in himaginaryの日記 on 2012-07-30 12:00:00
    2. Imperfect substitution between pension wealth and savings
      by Economic Logician in Economic Logic on 2012-07-26 20:09:00

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    1. Elin Halvorsen & Zhiyang Jia & Herman Kruse & Trond C. Vigtel, 2024. "Social security pension and the effect on household saving," Scandinavian Journal of Economics, Wiley Blackwell, vol. 126(3), pages 529-560, July.
    2. Ke Meng & Shouhao Li, 2023. "Welfare Regimes and Intergenerational Social Mobility: An Institutional Explanation of the Great Gatsby Curve," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 165(1), pages 355-375, January.

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    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making

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