This paper quantifies the business cycle effects and distributional implications of pension fund restoration policy after the economy has been hit by a financial shock. We extend a canonical New-Keynesian dynamic general equilibrium model with a tractable demographic structure and a pension...

In 2000 Italy replaced its traditional system of severance pay for public employees with a new system. Under the old regime, severance pay was proportional to the final salary before retirement; under the new regime it is proportional to lifetime earnings. This reform entails substantial losses...

In this paper we extend the traditional life cycle model of saving and portfolio choice to allow for possible long-term unemployment spells to have permanent effects on subsequent labor income prospects. The risk of losing future labor income could imply strong human capital erosion for the...

There is a common perception that households are under-saving for retirement - indeed this has motivated many recent policy reforms in the UK. In this paper we use a structural model, specified to closely match the UK policy environment, to investigate this ‘fact' for the cohort born in the...

We characterize the optimal default fund in a defined contribution (DC) pension plan. Using detailed data on individuals and their holdings inside and outside the pension system, we find substantial heterogeneity among default investors in terms of labor income, financial wealth, and stock...

Survey data show that many respondents save for retirement in unconventional retirement accounts, such as investments in real estate. In countries where retirement savings are not mandatory for self-employed, representatives of this group often report this as an argument against making...

We analyze whether uncertainty related to the outcome of future policy results in precautionary saving. We focus on an important cause of policy uncertainty for households in the Netherlands: the possible limitation of the mortgage interest deduction. To isolate the effect of policy uncertainty...

Precautionary savings have often been analyzed with regard to its impact on current savings. This work focuses instead on the impact of uncertainty on savings under bequest form. We thus turn the focus on estimating whether and to what extent income variability does have an effect on post-mortem...

We study the displacement effect of mandatory occupational pension saving on private household wealth in the Netherlands, separately for wage-employed and self-employed. We use rich administrative data on (pension) wealth and income and apply a range of identification strategies, from IV...

We use a confirmatory factor analysis to study the relation between the importance of a broad spectrum of saving motives, such as saving for retirement, and saving behavior. Survey data show that many respondents save for retirement in unconventional retirement accounts, such as investments in...