Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/162860
Authors: 
Dögüs, Ilhan
Year of Publication: 
2017
Series/Report no.: 
Discussion Papers, Zentrum für Ökonomische und Soziologische Studien 63
Abstract: 
It has already been pointed out in the literature on financialisation that private pension funds have played a key role in the inflation of financial markets. This paper argues that an increase in wage dispersion between white-collar and blue-collar workers affects pension funds in a direct and structural manner. Using Saez-Zucman and fred.stlouisfed annual datasets, the proposed argument is statistically analysed by applying Vector Autoregressive modelling for the period 1966-2013 in the USA. The results show that the responses of share of pension funds within US-household wealth to one-unit shock in wage dispersion are positive and significant over the first three years. Furthermore, wage dispersion explains 11% of variations in pension funds' share in household wealth in the short-run and 19% of variations in the long-run. The study concludes that wage dispersion has a direct and structural impact on pension funds and contributes to the literature by clarifying the rise and expansion of pension funds.
Subjects: 
financialisation
pension funds
wage dispersion
savings out of salaries
white-collar workers
capital market inflation
JEL: 
J31
D14
E44
Document Type: 
Working Paper

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