Does Homeownership Partly Explain Low Participation in Supplementary Pension Schemes?

25 Pages Posted: 6 Jun 2016

See all articles by Costanza Torricelli

Costanza Torricelli

University of Modena and Reggio Emilia - Department of Economics; Università degli studi di Modena e Reggio Emilia (UNIMORE) - Center for Research in Banking and Finance (CEFIN); Center for Research on Pensions and Welfare Policies (CeRP)

Maria Cesira Urzì Brancati

Università degli studi di Modena e Reggio Emilia (UNIMORE) - Library of Economics

Marco Santantonio

University of Bergamo

Multiple version iconThere are 2 versions of this paper

Date Written: July 2016

Abstract

To investigate a possible trade‐off between homeownership and individual participation in a supplementary pension scheme, we use nine waves of the Bank of Italy's Survey on Household income and Wealth (1995–2012). Italy lends itself to this type of investigation because the Italian public pension system was heavily reformed in the period, providing in principle incentives for participation, and the homeownership rate is very high. The impact of homeownership is captured in two ways: by a dummy for being homeowner and by an index capturing household portfolio illiquidity due to housing. Our results show that, after controlling for a vast array of socio‐economic characteristics and allowing for unobserved individual heterogeneity, both measures of homeownership are negatively associated with participation in supplementary pension schemes. Moreover such an effect persists both in boom and bust phases of the housing market and does not disappear even after tax incentives and a strong default option introduced by the 2007 reform.

Suggested Citation

Torricelli, Costanza and Brancati, Maria Cesira Urzì and Santantonio, Marco, Does Homeownership Partly Explain Low Participation in Supplementary Pension Schemes? (July 2016). Economic Notes, Vol. 45, Issue 2, pp. 179-203, 2016, Available at SSRN: https://ssrn.com/abstract=2790370 or http://dx.doi.org/10.1111/ecno.12054

Costanza Torricelli (Contact Author)

University of Modena and Reggio Emilia - Department of Economics ( email )

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Università degli studi di Modena e Reggio Emilia (UNIMORE) - Center for Research in Banking and Finance (CEFIN) ( email )

via Berengario 51
Modena, modena I-41100
Italy

Center for Research on Pensions and Welfare Policies (CeRP) ( email )

Via Real Collegio, 30
Moncalieri, Turin 10024
Italy

Maria Cesira Urzì Brancati

Università degli studi di Modena e Reggio Emilia (UNIMORE) - Library of Economics

United States

Marco Santantonio

University of Bergamo ( email )

Via Salvecchio, 19
Bergamo, 24129
Italy

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