Pension Wealth and Household Saving: Evidence from Pension Reforms in the United Kingdom
Orazio P. Attanasio
American Economic Review
no. 5, December 2003
Using three major U.K. pension reforms as natural experiments we investigate the relationship between pension saving and discretionary private savings. Unlike most differences-in-differences approaches which rely on average differences between control and treatment group, we use economic theory to model the response of each individual household. The empirical analysis, based on the Family Expenditure Survey, uses both time-series and cross-sectional variation to identify the behavioral response. The earnings-related tier of the pension scheme is found to have a negative impact on private savings with relatively high substitution elasticities; the impact of the flat-rate tier is not significantly different from zero.
Attanasio, Orazio, P., and Susann Rohwedder.
"Pension Wealth and Household Saving: Evidence from Pension Reforms in the United Kingdom."
American Economic Review,
Household Saving; Personal Finance
Intertemporal Household Choice; Life Cycle Models and Saving
Social Security and Public Pensions
Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions