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The Effect of Public Pension Wealth on Saving and Expenditure

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  • Marta Lachowska
  • Michał Myck

Abstract

This paper examines the degree of substitution between public pension wealth and private saving by studying Poland's 1999 pension reform. The analysis identifies the effect of pension wealth on private saving using cohort-by-time variation in pension wealth induced by the reform. The estimates, which are based on the 1997-2003 Polish Household Budget Surveys, show that 1 Polish zloty (PLN) less of pension wealth increases household saving by 0.3 PLN. Among highly educated households, pension wealth and private saving appear to be close substitutes.

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  • Marta Lachowska & Michał Myck, 2018. "The Effect of Public Pension Wealth on Saving and Expenditure," American Economic Journal: Economic Policy, American Economic Association, vol. 10(3), pages 284-308, August.
    • Handle: RePEc:aea:aejpol:v:10:y:2018:i:3:p:284-308
    Note: DOI: 10.1257/pol.20150154
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    More about this item

    JEL classification:

    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs

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