I argue that the offsetting effect of public pension contributions on household retirement saving depends on how closely the public pension programme imitates a private retirement saving plan (i.e. the ‘actuarial’ content of the public pension programme)–the closer the design of the programme to a private retirement saving plan, the higher the offset. I estimate the determinants of household saving rates in a cross–country panel, augmenting standard measures of public pension programme generosity and cost by indicators that proxy the actuarial component of the programme. These indicators affect saving rates as predicted.
Alessie, M., Kapteyn, A. and Klijn, F. (1997), ‘Mandatory pensions and personal savings in the Netherlands’, De Economist, 145, 3, pp. 291–324.
2.
Attanasio, O. and Brugiavini, A. (2003), ‘Public pension and households' saving’, Quarterly Journal of Economics, 118, August, pp. 1075–1119.
3.
Attanasio, O. and Rohwedder, S. (2003), ‘Pension wealth and household saving: evidence from pension reforms in the U.K.’, American Economic Review, 93(5), pp. 1499–1521.
4.
Barro, R. and MacDonald, G. (1979), ‘Public pension and consumer spending in an international cross section’, Journal of Public Economics, 11, June, pp. 275–289.
5.
Blanchard, O. and Wolfers, J. (2000), ‘The role of shocks and institutions in the rise of European unemployment: the aggregate evidence’, Economic Journal, 110, March, pp.C1–C33.
6.
Blöndal, S. and Scarpetta, S. (1998) ‘The retirement decisions in OECD countries’, OECD Economics Department Working Paper, No. 202, Paris.
7.
Boeri, T., Börsch–Supan, A. and Tabellini, G. (2001), ‘Would you like to shrink the welfare state? The opinions of European citizens’, Economic Policy, 16, April, pp. 7–50.
8.
Bottazzi, R., Jappelli, T. and Padula, M. (2004), ‘Retirement expectations, pension reforms, and their impact on private wealth accumulation’, mimeo, University of Salerno.
9.
Callen, T. and Thimann, C. (1997), ‘Empirical determinants of household saving: evidence from OECD countries’, International Monetary Fund Working Paper WP/97/181, Washington DC.
10.
Casamatta, G., Cremer, H. and Pestieau, P. (2000), ‘Political sustainability and the design of social insurance’Journal of Public Economics, 75, pp. 341–364.
11.
Disney, R. (2000a), ‘The impact of tax and welfare policies on employment and unemployment in OECD countries’, International Monetary Fund Working Paper WP/00/164, Washington DC.
12.
Disney, R. (2000b), ‘Declining public pensions in an era of demographic ageing: will private provision fill the gap?’, European Economic Review, 44, March/April, pp. 957–973.
13.
Disney, R. (2004), ‘Are contributions to public pension programmes a tax on employment?’Economic Policy, 39, July, pp. 269–311, and discussion thereof.
14.
Dominitz, J., Manski, C. and Heinz, J. (2003), ‘Will public pension be there for you? How Americans perceive their benefits’, National Bureau of Economic Research Working Paperw9798, June.
15.
Engen, E. and Gale, W. (1997), ‘Effects of public pension reform on private and national saving’, in Sass, S. and Triest, R. (eds) Public Pension Reforms: Links to Saving, Investment and Growth, Conference Series No. 41, Federal Reserve Bank of Boston, Mass.
16.
Feldstein, M. (1974), ‘Public pension, induced retirement and aggregate capital accumulation’, Journal of Political Economy, 82, 5, pp. 905–926.
17.
Feldstein, M. (1980), ‘International differences in public pension and saving’, Journal of Public Economics, 14, pp. 225–244.
18.
Feldstein, M. (1987), ‘Should public pension benefits be means–tested?’Journal of Political Economy, 95, June, pp. 468–484.
19.
Feldstein, M. (1996), ‘Public pension and saving: new time series evidence’, National Tax Journal, 49, June, pp. 151–164.
20.
Gokhale, J., Kotlikoff, L. and Sabelhaus, J. (1996), ‘Understanding the postwar decline in US saving: a cohort analysis’, Brookings Papers on Economic Activity, 1, pp. 315–390.
21.
Hubbard, G. (1986), ‘Pension wealth and individual saving’, Journal of Money, Credit and Banking, 18, 2, pp. 167–178.
22.
Jappelli, T. and Modigliani, F. (2003), ‘The age–saving profile and the life–cycle hypothesis’, forthcoming, The Collected Papers of Franco Modigliani, Volume 6, MIT Press.
23.
Jappelli, T. and Pagano, M. (1994), ‘Saving, growth and liquidity constraints’, Quarterly Journal of Economics, 109, February, pp. 83–109.
24.
Koskela, E. and Viren, M. (1983), ‘Public pension and household saving in an international cross section’, American Economic Review, 73, 1, pp. 212–216.
25.
Kotlikoff, L. (1979), ‘Testing the theory of public pension and life cycle accumulation’, American Economic Review, 69, June, pp. 396–410.
26.
Leimer, D. and Lesnoy, S. (1982), ‘Public pension and private saving: new time–series evidence’, Journal of Political Economy, 90, June, pp. 606–629.
27.
Lindbeck, A. and Persson, T. (2003), ‘The gains from pension reform’, Journal of Economic Literature, XLI, March, pp. 74–112.
28.
Loayza, N., Schmidt–Hebbel, K. and Serven, L. (2000), ‘What drives private saving across the world?’, Review of Economics and Statistics, 82, May, pp. 165–181.
29.
Modigliani, F. (1986), ‘Life cycle, individual thrift and the wealth of nations’, American Economic Review, 76, 3, pp. 297–313.
