Savings and pensions in The Netherlands

We describe the distribution of private wealth of Dutch households over the life cycle and relate this to the size of individual entitlements to pay-as-you-go social security benefits and funded pension benefits. We also investigate saving motives and find that saving for old age plays only a minor role. Precautionary motives play some role, but in view of the very extensive social safety net it does not seem likely that precaution is an important factor in saving decisions. Altogether, the data are consistent with the view that an extensive social safety net and generous old age income provisions reduce the need to accumulate private wealth.     

Do the Rich Save More in Japan? Evidence Based on two Micro Data Sets for the 2000s

Using two household surveys, this paper investigates whether the saving rates of richer households are higher than those of poorer households in Japan. We construct a number of proxies for lifetime wealth, including those original to this study, and find marginally positive correlations between saving rates and lifetime wealth for working age households. We further find that the relationship between saving rates and lifetime wealth differs depending on the life stage of individual households. Older households with higher lifetime wealth appear to be dissaving to some extent, which is more or less consistent with the lifecycle model of consumption.     

中国城镇家庭财产水平研究:基于行为的视角

本文首先提出了一个各种因素影响家庭财产水平的理论框架。然后通过对奥尔多投资研究中心2007年"城市投资者行为调查问卷"数据的处理和实证分析,估算了中国城镇居民的财产函数,重点考察了户主的主观行为特征在财产积累过程中的重要作用。本文发现:户主投资参与度与风险偏好度的提高有利于家庭财产水平的增加;与低收入或者经济相对落后地区的家庭相比,对高收入或者经济发达地区的家庭来说,投资参与度与风险偏好度对家庭财产水平的积极影响更显著一些。最后,针对政府如何促进居民财产水平的提升,本文给出了相关的政策建议。     

Social security and unsecured debt

In this paper, we use a calibrated life-cycle model to explore quantitatively ways of reducing the burden of social security in a world populated by both optimizing and rule-of-thumb consumers. Social security contributions force young households with upward-sloping income profiles to save a sizeable portion of their income for retirement, when their optimal consumption plan would likely have them either saving little or borrowing. We first use household data to document that young households have accumulated social security contributions that are large relative to debt holdings. Then, using a calibrated life-cycle model, we show that both allowing households to use social security wealth to pay off their debt and exempting young households from social security contributions (but in both cases requiring higher contributions later) mitigate many of the inefficiencies of social security from the perspective of life-cycle financial planning. Specifically, in our preferred experiment, which exempts households whose heads are under 30 from making social security contributions, we find that certainty-equivalent consumption increases by 3.4% for optimizing households and by 3.3% for rule-of-thumb households.     

养老保险改革对家庭储蓄率的影响:中国的经验证据

本文利用1995年和1999年城镇住户调查数据(CHIPS)分析中国养老保险制度改革对家庭储蓄率的影响,从一个新的角度解释20世纪90年代中后期中国家庭储蓄率上升的原因。1995—1997年间中国对城镇企业职工进行的养老保险制度改革使得企业职工养老金财富发生变化,这种养老金财富的变化具有外生性,因而这项改革可以作为一项政策实验用来识别养老金财富对家庭储蓄率的影响。研究结果表明:中国的储蓄行为可以由生命周期模型解释;养老金财富对于家庭储蓄存在显著的替代效应,这一效应平均为-0.4—-0.3左右;但不同家庭这种替代效应有明显差异,户主年龄在35—49岁的家庭,储蓄率会显著受到养老金财富的影响,其他家庭这一影响并不显著。     

HOW CERTAIN ARE DUTCH HOUSEHOLDS ABOUT FUTURE INCOME? AN EMPIRICAL ANALYSIS

The precautionary saving literature shows that income uncertainty increases savings and wealth. To estimate the magnitude of this effect, we need a measure of income uncertainty. This paper empirically analyzes subjective income uncertainty in The Netherlands. Data come from a large Dutch household survey. We measure income uncertainty by asking questions on expected household income in the next twelve months. First, we describe the data and investigate the relationship between the measure of income uncertainty and a number of household characteristics. Controlling for information on expected income changes, we find strong relationships between labor-market characteristics and the subjective income uncertainty as reported by the heads of the households. Second, we compare income uncertainty in The Netherlands with income uncertainty in the U.S. and Italy. It becomes evident that perceived income uncertainty is smaller in The Netherlands than it is in the U.S.     

An empirical analysis of household savings in France 1984–1998

In this paper we analyse the saving behaviour of French households by cohort and by age. We exploit two data sets: the Household Budget Surveys (HBS) allow us to define saving as residual of income minus consumption, while the Financial Assets Surveys (FAS) give us saving as changes in wealth. We make use of both financial assets surveys, gross them up using national accounts, and distinguish between “active” and “passive” saving.In France, tax policies appear to be one of the main factors that explain the recent evolution of household saving rates. The complex tax treatment of savings and capital income as well as the way in which households perceive the future of the French retirement pension system (5) also help to explain the composition of active and passive saving.     

HOUSEHOLD SAVING AND PORTFOLIO CHANGE: EVIDENCE FROM THE 1983–89 SCF PANEL

There are few sources of high-quality data on the dynamics of wealth accumulation. This paper uses newly available data from the 1983 89 panel of the Survey of Consumer Finances to examine household saving and portfolio change over the 1980s. Our main findings are as follows. First, median household wealth rose modestly over the period. Second, while overall wealth inequality increased, households in the top 1 percent of the wealth distribution in 1983 saw their share of total wealth decline, probably reflecting turnover among the very wealthy. Third, although age, income, and initial wealth had significant effects in regressions on household saving, a large part of the variation in saving was unexplained. Finally, there were clear life-cycle patterns in the portfolios of assets and liabilities held by households, with younger households acquiring homes, businesses and all types of debts, and older households divesting themselves of these assets and debts.     

Precautionary savings of agents with heterogeneous risk aversion

This article focuses on the estimation of the importance of the precautionary motive in the wealth accumulation decision. We use the micro data set of the De Nederlandsche Bank (DNB) Household Survey (DHS) (CentERdata, Tilburg University), a Dutch household survey containing information on wealth, a subjective measure of income uncertainty and subjective qualitative measures of risk aversion. We find that only a small share of wealth is accumulated for the precautionary motive by the Dutch households. This share of wealth is constant across assets with different degrees of liquidity. The economic downturn of the period 2008 to 2010 seems to affect risk attitudes and precautionary saving. Our findings also suggest that the more risk-averse individuals are those who hold less savings.     

A NEW LOOK AT THE WEALTH ADEQUACY OF OLDER U.S. HOUSEHOLDS

We examine the current wealth adequacy of older U.S. households using the 1998–2006 waves of the Health and Retirement Study (HRS). We find that the median older U.S. household is reasonably well situated, with a ratio of comprehensive net wealth to present value poverty‐line wealth of about 3.9 in 2006. About 18 percent of households, however, have less wealth than would be needed to generate 150 percent of poverty‐line income over their expected future lifetimes. We see similar patterns of wealth adequacy when we examine ratios of annualized comprehensive wealth to pre‐retirement earnings. Comparing the leading edge of the baby boomers in 2006 to households of the same age in 1998, we find that the baby boomers show slightly less wealth, in real terms, than their elders did, but still appear to have adequate resources at the median. Moreover, we find a rising age profile of annualized wealth, even within households over time and after controlling for other factors, suggesting that older households are not spending their wealth as quickly as their survival probabilities are falling.     

Tax treatment of owner occupied housing and wealth inequality

We construct a quantitative general equilibrium lifecycle model with housing tenure decisions to investigate the degree to which wealth inequality in the United States is affected by the preferential tax treatment of home-ownership. Favorable tax treatment of owner occupied housing in the form of home mortgage interest and property tax deductibility, and the untaxed nature of imputed rents, provides a financial incentive for home-ownership over renting as well as an incentive to “over-consume” housing since houses are not fungible. Since the favorable tax treatment of housing disproportionately creates tax savings for the upper quantiles of the income distribution, we quantify how it contributes to the heavily right skewed distribution of wealth in the United States using data from the Survey of Consumer Finances. We consider a revenue-neutral government response to the counter factual experiments of removing the current tax structure on housing. Our quantitative analysis shows that, in terms of distributional effects, removing all of the preferential tax treatments results in an aggregate increase in welfare. However, we do not find any reduction in inequality. We also find that while some re-allocation toward financial assets occurs, households primarily increase their consumption when imputed housing rents are taxed and the property tax deduction is removed. Thus housing tax policy may be effective at encouraging more overall saving through housing assets.     

Estimating the marginal propensity to consume using the distributions of income,consumption, and wealth

Studies of economic inequality almost always separately examine income, consumption, and wealth inequality, and hence, miss the important synergy amongst the three measures explicit in the life-cycle budget constraint. These joint distributions, however, are important in evaluating macroeconomic impacts of changes in income because the response may differ across the wealth distribution. This heterogeneity in the response to income changes can have significant impact on the effectiveness of government fiscal policy. Using the Panel Study of Income Dynamics from 1999–2013, we examine how the marginal propensity to consume (MPC) differs across the wealth distribution. We find that the MPC is lower at higher wealth quintiles, indicating that low wealth households cannot smooth consumption as much as other households. This implies that increasing wealth inequality likely reduces aggregate consumption, which, in turn, could limit economic growth.     

Precautionary wealth accumulation: evidence from Canadian microdata

Abstract .  This paper estimates the effect of labour income uncertainty on wealth accumulation using two data sources. Wealth information is obtained from the master files of the new Canadian Survey of Financial Security 1999 (SFS). Labour income risk proxies are constucted by industry using the Canadian Survey of Labour and Income Dynamics (SLID) between 1996 and 2001. The empirical results suggest the presence of a strong precautionary saving motive among Canadian households for broad definitions of wealth. Furthermore, consistent with the buffer-stock-saving model, the level of precautionary funds significantly increases when households face liquidity constraints.     

财富积累、习惯、偏好改变、不确定性与家庭消费决策

在本文中,我们建立了一个相当一般的分析家庭消费与储蓄跨期优化决策问题的理论框架。使用综合了家庭的当期消费、消费习惯、财富积累、偏好改变多种作用影响的效用函数,在家庭劳动收入具有不确定性的情况下,我们导出了家庭消费与储蓄跨期优化决策问题的闭式解,给出了家庭消费函数和欧拉方程的解析式。使用中国农村居民的住户调查数据对理论模型中导出的欧拉方程进行估计的结果表明,除了收入和家庭财富以外,消费习惯和预防性储蓄动机确实也都是影响我国农村居民家庭的消费与储蓄决策的重要因素。     

EFFECTS OF STOCK MARKET FLUCTUATIONS ON THE ADEQUACY OF RETIREMENT WEALTH ACCUMULATION

This paper examines the relation between fluctuations in the aggregate value of equities and the adequacy of households’ saving for retirement. Using more recent data than most studies on this topic, we find that many and perhaps most households appear to be saving adequate amounts for retirement, and that there is almost no link between aggregate equity values and the adequacy of retirement saving. A simulated 40 percent decline in stocks has little effect on the adequacy of saving. The substantial growth in equity values and ownership in the 1980s and 1990s did not lead to a surge in the adequacy of retirement saving provisions. The results occur because equity holdings are concentrated among households with significant amounts of other wealth.     

双重不确定性下的流动劳动力储蓄行为--对“中国储蓄之谜”的另一种解读

基于2012年广东省调查数据,从收入不确定性和支出不确定性两个方面研究预防性储蓄对流动劳动力储蓄行为的影响,发现：（1）流动劳动力储蓄行为与收入水平显著相关,高储蓄率是通过“节衣缩食”、维持基本生存消费来实现;（2）流动劳动力储蓄行为与收入不确定性相关,技能程度、签订劳动合同、劳动合同期限年限对流动劳动力储蓄率有显著影响;（3）流动劳动力储蓄行为与支出不确定性相关,在流入地购买社保、户口性质等对流动劳动力储蓄率有显著影响。研究结果拓展了“中国储蓄之谜”的研究领域,为加快实现流动人口城镇化、推动流动劳动力市民化融入提供了初步的经验证据。     

Explaining the wealth holdings of different cohorts: Productivity growth and Social Security

In this paper, we explore the reasons why different generations accumulate different amounts of wealth. We use basic economic theory to propose two indicators of the economic conditions under which households accumulate wealth. The first one represents productivity differences across cohorts: The aggregate level of gross national product per capita around the time the head of the household entered the labor market. The second measure summarizes the changes in Social Security during the head of household's working life. Using panel data from the Dutch Socio-Economic Panel, we show that productivity growth can explain all the cohort effects present in income data, while productivity growth and the generosity of Social Security can explain all the cohort effects present in household net worth. We also find a limited offset of Social Security on wealth holdings.     

Malnutrition in the shadow of economic growth

We formulate the consumption and wealth accumulation behavior for low‐income agents who are concerned with their relative income with respect to a reference group. Using a dynamic consumption and saving model, we show the conditions under which low‐income and status‐seeking individuals accumulate more wealth and consume less of a nutritious good than the levels in the absence of status‐seeking behavior. Our results suggest that malnutrition and economic growth may go hand in hand in developing economies.     

Can entrepreneurship bring happiness? Evidence from China

This paper investigates the relationship between entrepreneurial activities and the happiness of entrepreneurs. We estimate the effects of entrepreneurial decision-making, business experience and other factors on happiness by using China Household Finance Survey data. Our results derived from maximum likelihood estimation methods indicate that entrepreneurial decision-making and entrepreneurial experience affect household happiness significantly. The family well-being is significantly increased if the family is entrepreneurial, and it will be higher if actively entrepreneurial. Both entrepreneurial experience and entrepreneurial investment of time have significantly positive effect on the probability of family well-being. In addition, we find that the mechanism by which entrepreneurship brings happiness to households is through raising household income and wealth, that is, income effects and wealth effects.