EconPapers    
Economics at your fingertips  
 

Individual Pension Plans in Spain: How Expected Change in Future Income and Liquidity Constraints Shape the Behavior of Households

Dolores Moreno-Herrero (), Manuel Salas-Velasco () and José Sánchez-Campillo ()
Additional contact information
Dolores Moreno-Herrero: University of Granada
Manuel Salas-Velasco: University of Granada
José Sánchez-Campillo: University of Granada

Journal of Family and Economic Issues, 2017, vol. 38, issue 4, No 10, 596-613

Abstract: Abstract Understanding the motives that underlie Spaniards’ retirement saving decisions is important because many, if not most, future retirees will need to rely on personal savings to maintain a decent standard of living. The governor of the Bank of Spain has stated recently that the current public pension system will not guarantee an adequate pension to the citizens, advising to save now for retirement. In this debate on public pensions, and the complementary role that private pensions might play in Spain, this article has shed light on the decision of Spanish households to engage in individual pension plans and it has identified which factors determine the total amount saved in such retirement plans. Using micro data from the Bank of Spain (Survey of Household Finances 2011), the analysis has revealed that the expectations of lower future income, along with preferences for the financial risk and education, exert an important influence on the likelihood of enrolling in a private pension plan. University education minimizes the myopic behavior of households in the sense of making them more forward-looking and cautious in the face of their future well-being. Additionally using Heckman’s methodology to correct for the problem of selection bias, our results have revealed that liquidity constraints affect negatively the total amount of money saved for retirement.

Keywords: Individual private pension plans; Family finances; Logit models; Heckman two-step method (search for similar items in EconPapers)
JEL-codes: H31 I29 J1 J26 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
http://link.springer.com/10.1007/s10834-017-9526-7 Abstract (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kap:jfamec:v:38:y:2017:i:4:d:10.1007_s10834-017-9526-7

Ordering information: This journal article can be ordered from
http://www.springer. ... es/journal/10834/PS2

DOI: 10.1007/s10834-017-9526-7

Access Statistics for this article

Journal of Family and Economic Issues is currently edited by Joyce Serido

More articles in Journal of Family and Economic Issues from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().

 
Page updated 2025-03-19
Handle: RePEc:kap:jfamec:v:38:y:2017:i:4:d:10.1007_s10834-017-9526-7