Pension Entitlements of French and American Households : A First Comparison

Advanced countries worry about the future of their pay-as-you go pension schemes and try to introduce supplementary sources for revenue following employment termination. It is thus useful to understand how the pension schemes influence households behavior regarding saving and accumulation of assets. Two countries have been chosen for comparison due to their very different structures regarding pension schemes: France and the United States. For each of them, the paper presents available data regarding the present value of households' pension entitlements on pay-as-you-go pension schemes and adds the authors' estimation from the World Bank model for pension (PROST) regarding the social security. In this light, households' choice regarding savings, assets, and risk structure of their portfolio are examined. Results of the comparison are not straightforward: on aggregated data, households don't seem to take into account their pension entitlements on pay-as-you go scheme in order to define the amount of their assets. Neither is there any long term correlation between pension entitlements and American households' saving, while examined within the framework of a life cycle model