Does mandatory saving crowd out voluntary saving? Evidence from a pension reform

Zoega, Gylfi and Hougaard Jensen, S. and Olafssson, S.P. and Sveinsson, T.S. and Stefansson, A.S. (2025) Does mandatory saving crowd out voluntary saving? Evidence from a pension reform. Review of Economics and Statistics , ISSN 0034-6535. (In Press)

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Abstract

Recently, mandatory pension contributions in Iceland were increased substantially in the private sector while remaining unchanged in the public sector. Taking this as a large natural experiment, this paper studies the effects of this change on households’ voluntary saving, using comprehensive third-party reported information on income, assets, and debt for all taxpayers. Using difference-in-differences, ee find that households do not reduce voluntary saving when faced with a rise in mandatory saving. Our results are supported by an event study of workers switching from the private sector to the public sector. Survey evidence suggests widespread ignorance about the pension system.

Metadata

Item Type:	Article
Keyword(s) / Subject(s):	Pension reform, mandatory saving, crowding-out, voluntary saving
School:	Birkbeck Faculties and Schools > Faculty of Business and Law > Birkbeck Business School
Depositing User:	Gylfi Zoega
Date Deposited:	04 Apr 2025 15:41
Last Modified:	04 Apr 2025 15:41
URI:	https://eprints.bbk.ac.uk/id/eprint/55243

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