Pension wealth and household savings in Europe: Evidence from SHARELIFE

Rob Alessie, Viola Angelini and Peter van Santen ()

European Economic Review, 2013, vol. 63, issue C, 308-328

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 (search for similar items in EconPapers)
JEL-codes: D31 D91 H55 (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (74)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:eecrev:v:63:y:2013:i:c:p:308-328

DOI: 10.1016/j.euroecorev.2013.04.009

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