Arbeitspapier

Intra-household allocation of non-mandatory retirement savings

Traditionally, households have been seen as acting as a single unit when it comes to savings. Although this might be correct for some parts of household savings, we question the correctness of the unitary model with respect to non-mandatory retirement savings. To answer this question we analyze the intra-household allocation of retirement savings between partners in Germany. First, the decision to save at all is analyzed using a seemingly unrelated bivariate probit model, showing that the possession of retirement saving accounts among spouses is positively correlated, hinting at a 'crowding-in' of saving accounts. However, this could be only due to some tax reasons. Thus, we analyze additionally the interaction of savings between spouses using three-stage least squares, allowing for endogeneity between the spouse's savings. These results additionally show a 'crowding-in' of total retirement saving amounts between spouses, probably due to some 'recognition effect'. The unitary model of household decision making can thus be rejected with respect to retirement savings.

Language: Englisch

Bibliographic citation: Series: Diskussionsbeiträge ; No. 60

Classification: Wirtschaft
Household Saving; Personal Finance
Micro-Based Behavioral Economics: Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making‡
Fiscal Policies and Behavior of Economic Agents: Household

Subject: savings
intra-household allocation
retirement
life-cycle
unitary model
household decision
three-stage least squares

Event: Geistige Schöpfung

(who): Metzger, Christoph

Event: Veröffentlichung

(who): Albert-Ludwigs-Universität Freiburg, Forschungszentrum Generationenverträge (FZG)

(where): Freiburg i. Br.

(when): 2016

Handle: http://hdl.handle.net/10419/129202

Last update: 10.03.2025, 11:43 AM CET

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Object type

Arbeitspapier

Associated

Metzger, Christoph
Albert-Ludwigs-Universität Freiburg, Forschungszentrum Generationenverträge (FZG)

Time of origin

2016

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Arbeitspapier