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Decomposition of effects of social security on private savings

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  • HONG, MINKI

Abstract

The main aim of this paper is to decompose the effects of social security on private savings and quantify to what extent each factor that impacts saving behavior account for the effects of social security. For this purpose, I estimate a stochastic dynamic model in which households facing income and survival uncertainty choose optimal levels of consumption, asset holdings and labor supply. In this model, social security pensions reduce private assets by less than 10%. Bequest and precautionary savings motives are the main reasons of this partial offset. Uncertainty on future benefits has no role to play on the effect.

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  • Hong, Minki, 2012. "Decomposition of effects of social security on private savings," Journal of Pension Economics and Finance, Cambridge University Press, vol. 11(3), pages 419-438, July.
    • Handle: RePEc:cup:jpenef:v:11:y:2012:i:03:p:419-438_00
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    Cited by:

    1. Nguyen, John, 2023. "The impact of private health insurance on household savings : Evidence from Australia," Warwick-Monash Economics Student Papers 48, Warwick Monash Economics Student Papers.
    2. Renáta Pitoňáková, 2018. "Private Sector Savings," DANUBE: Law and Economics Review, European Association Comenius - EACO, issue 1, pages 1-17, March.

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