Do you have an occupational pension? On the interplay between demand, supply and information

Mitarbeiter in diesem Projekt:

Understanding how households form their long-term saving and investment decisions to shoulder risks not covered by social security systems has been of primary importance in all countries which introduced major reforms to face the challenges of an aging population. Recognizing the increasing importance of supplementary pension, this study investigates the determinants for participation in an occupational pension scheme. While most of the available evidence on occupational pensions is based on the USA or the UK, countries where the multi-pillar system has a much longer tradition, very little is known about their diffusion in countries where public pensions used to be very generous until recently and where the tradition to save privately for retirement is thus lacking. This study therefore focuses on Germany, a country which transited towards a multi-pillar pension system about a decade ago. Using a rich dataset linking survey data on the household context with administrative information on individuals and establishments, our study provides new evidence on the interplay between demand and perceived availability of occupational pensions. Our analysis proceeds in two steps. First, we analyse differences in the perceived availability of occupational pension schemes by workers characteristics. Moreover, we will extend our comparison to characteristics of the establishment these workers are currently employed at. In a second step, we will consider the correlates with participation in an occupational pension scheme conditional on perceived availability. We find that while major differences exist between respondents who work for an establishment offering an occupational pension and those who report not to know or who say that there is no occupational pension, some of these differences are not pervasive in the decision to participate once we control for perceived availability. Additional research is needed to investigate causal relationships between the regulatory framework and the cost and benefits of occupational pensions for both sides of the labor market. We consider our paper as a first step in this direction.

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