Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/227874
Authors: 
Andersen, Henrik Yde
Hansen, Niels Lynggård
Kuchler, Andreas
Year of Publication: 
2020
Series/Report no.: 
Danmarks Nationalbank Working Papers No. 156
Publisher: 
Danmarks Nationalbank, Copenhagen
Abstract: 
This paper uses two decades of individual level information from Danish administrative registers to show that a 1-dollar increase in pension wealth leads to a 26-cent rise in total debt. We exploit time-sector variation in mandatory pension contribution rates to isolate the effect of pension wealth on the full financial balance sheet. Concerns of confounding factors are mitigated by sampling employees in identical occupations who have worked in the same sectors but at different points in time. Liquidity constraints seem to play a key role, and we couple the crowding-out effect with an increased propensity to use interest-only mortgages.
Subjects: 
Household debt
Household balance sheets
pension savings
JEL: 
D14
D15
E21
Document Type: 
Working Paper

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