Article ID Journal Published Year Pages File Type
7351394 European Economic Review 2018 42 Pages PDF
Abstract
This paper applies a quasi-experimental research design on a Danish 2010 policy that reduced tax incentives for saving in annuity pension schemes to show significant substitution of savings from retirement accounts to gross debt repayments. We find that for every 1 Danish currency unit reduction in retirement savings 31 cents goes to debt repayments. Taking into account all types of savings, we find full crowding-out. Consistent with previous findings, we document that the effect is driven by a minority, about 23 percent, who actively rebalance their savings.
Related Topics
Social Sciences and Humanities Economics, Econometrics and Finance Economics and Econometrics
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