The Influence of Social Models on Retirement Savings: Evidence for European Countries
Lucía Rey-Ares (),
Sara Fernández-López () and
Milagros Vivel-Búa ()
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Lucía Rey-Ares: University of Santiago de Compostela
Sara Fernández-López: University of Santiago de Compostela
Milagros Vivel-Búa: University of Santiago de Compostela
Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, 2018, vol. 136, issue 1, 247-268
Abstract Population ageing, together with the negative effects of the recent economic and financial crisis that some European countries are still facing, have threatened the sustainability of public pension systems. In this context, voluntary private pensions have emerged as the most feasible alternative to supplement the minimum provided by Social Security Systems; however, this financial product does not enjoy its expected popularity. A potential explanation of this reality might be due to the fact that European countries are far from being homogeneous, nor their pensions systems. Therefore, any policy geared toward improving financial retirement planning should take into account these potential differences. As a first approach to their analysis, this paper proposes the existence of four different ‘social models’ in Europe -namely, Continental, Mediterranean, Nordic and Transitional-. Overall, empirical evidence confirmed the significant influence of country’ ‘social model’ on the decision to invest in retirement accounts on a sample of 31,468 individuals in 2013. It was also proved that this decision is positively related to age, household income and wealth, higher levels of formal education, job situation, good health status, and long-term planning horizons; and negatively related to age squared, household size or financial risk aversion. In short, future policies and reforms regarding private pensions should not only take into account the existence of individual differences among Europeans, but also the existence of differences depending on institutional and cultural country factors.
Keywords: Social model; Retirement account; Private pension plan; Europe; SHARE (search for similar items in EconPapers)
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