Scandinavian Working Papers in Economics
Working Paper Series,
Sveriges Riksbank (Central Bank of Sweden)
No 265: Pension Wealth and Household Savings in Europe: Evidence from SHARELIFE
Rob Alessie (), Viola Angelini () and Peter van Santen ()
Additional contact information
Rob Alessie: University of Groningen and Netspar
Viola Angelini: University of Groningen and Netspar
Peter van Santen: Research Department, Central Bank of Sweden, Postal: Sveriges Riksbank, SE-103 37 Stockholm, Sweden
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. We show that addressing measurement error problems is crucial to estimate the displacement effect when using survey data. We find that each euro of pension wealth is associated with a 47 (61) cent decline in non–pension wealth using robust (median) regression. 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
43 pages, April 1, 2013
Full text files
rap_wp265_130424.pdf
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