Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/110172
Authors: 
Lachowska, Marta
Myck, Michal
Year of Publication: 
2015
Series/Report no.: 
IZA Discussion Papers 8895
Abstract: 
In order to study whether public pension systems displace private saving, we use the quasi-experimental variation in pension wealth created by Poland's 1999 pension reform. Using the 1997–2003 Polish Household Budget Surveys, we begin by estimating "difference-in-differences" regressions, where we compare household saving and expenditure across time and between cohorts affected and unaffected by the reform. Next, we estimate the extent of crowd-out by using two-stage least squares. We identify the effect of pension wealth on private saving by using the cohort-by-time variation in pension wealth that is explained by the reform. We find that one additional Polish zloty, or PLN, of pension wealth crowds out about 0.24 PLN in household saving. We also find heterogeneity in responses. For the middle-aged cohorts, we find a large public pension crowd-out of private saving (about 0.54 PLN of private saving for each 1 PLN of public pension wealth), while the crowd-out for younger cohorts equals about 0.30 PLN of private saving per 1 PLN. Finally, we find a close-to-complete crowd-out among highly-educated households.
Subjects: 
pension reforms
crowd-out effect
retirement saving
difference-in-differences
natural experiment
JEL: 
E21
H55
I38
P35
Document Type: 
Working Paper

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