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Public pension wealth and household asset holdings: new evidence from Belgium

Published online by Cambridge University Press:  22 January 2019

Mathieu Lefebvre Open the ORCID record for Mathieu Lefebvre [Opens in a new window]  and
Sergio Perelman
Mathieu Lefebvre*
Affiliation:
BETA, University of Strasbourg, Strasbourg, France
Sergio Perelman
Affiliation:
HEC, University of Liège and CREPP, Liege, Belgium
*
*Corresponding author. Email: Mathieu.lefebvre@unistra.fr
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Abstract

It has been long suggested that public pension wealth may crowd out household savings. However, there remains controversy about the extent of this displacement effect. In this paper we use an original microsimulation model based on retrospective survey data collected through the third wave of the Survey of Health, Ageing and Retirement in Europe (SHARE) to estimate the displacement effect of public pension wealth on other wealth in Belgium. Combining this rich dataset with an accurate estimation of the individual pension entitlements allows us to circumvent some of the main measurement error problems faced by previous studies. We estimate that an extra euro of public pension wealth is associated with about 14–25 cent decline in households’ non-pension wealth.

Keywords

Displacement effectmicrosimulationpublic pension wealthsavingD91H55E21J14
Type
Article
Information
Journal of Pension Economics & Finance , Volume 19 , Issue 3 , July 2020 , pp. 309 - 322
Copyright
Copyright © Cambridge University Press 2019

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