Pension Wealth and Household Saving in Europe: Evidence from SHARELIFE

30 Pages Posted: 1 Nov 2011

See all articles by Rob J. M. Alessie

Rob J. M. Alessie

University of Groningen; Netspar; Tilburg University - Center for Economic Research (CentER)

Viola Angelini

University of Groningen - Faculty of Economics and Business; Netspar

Peter van Santen

Sveriges Riksbank; Netspar

Date Written: October 1, 2011

Abstract

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 that estimate the displacement effect. We show the ability of the retrospective survey to generate cross-country differences in wages and pensions which are in line with expectations. The displacement effect is estimated to be equal to 47.1% using robust regression, and 60.9% using median regression techniques, and significantly different from zero and 100%. 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.

Keywords: Displacement effect, lifetime income, retrospective survey, measurement error

JEL Classification: D91, H55, D31

Suggested Citation

Alessie, Rob J. M. and Angelini, Viola and van Santen, Peter, Pension Wealth and Household Saving in Europe: Evidence from SHARELIFE (October 1, 2011). Netspar Discussion Paper No. 10/2011-088. Available at SSRN: https://ssrn.com/abstract=1951968 or http://dx.doi.org/10.2139/ssrn.1951968

Rob J. M. Alessie (Contact Author)

University of Groningen ( email )

P.O. box 800
9700 AV Groningen
Netherlands
050-3637240 (Phone)

HOME PAGE: http://members.chello.nl/~r.j.m.alessie

Netspar

P.O. Box 90153
Tilburg, 5000 LE
Netherlands

HOME PAGE: http://www.netspar.nl

Tilburg University - Center for Economic Research (CentER)

P.O. Box 90153
Tilburg, 5000 LE
Netherlands

Viola Angelini

University of Groningen - Faculty of Economics and Business ( email )

Postbus 72
9700 AB Groningen
Netherlands

Netspar ( email )

P.O. Box 90153
Tilburg, 5000 LE
Netherlands

Peter Van Santen

Sveriges Riksbank ( email )

Brunkebergstorg 11
Stockholm, SE-103 37
Sweden
004687870569 (Phone)
00468210531 (Fax)

Netspar ( email )

P.O. Box 90153
Tilburg, 5000 LE
Netherlands

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