PL EN
 
PL EN
Current Issue
Past Issues
About the Journal
For Authors
Contact Us
1/2023 vol. 313
Stats
CC-BY 4.0
Get citation
RESEARCH PAPER
The Displacement Effects of Social Security Wealth in a Transition Economy: The Case of Poland
Marcin Wroński 1
 
 
 
More details
Hide details
1
Collegium of World Economy, SGH Warsaw School of Economics, Poland
 
 
Submission date: 2022-01-25
 
 
Final revision date: 2022-11-15
 
 
Acceptance date: 2023-01-04
 
 
Publication date: 2023-03-31
 
 
Corresponding author
Marcin Wroński   

Collegium of World Economy, SGH Warsaw School of Economics, Poland
 
 
GNPJE 2023;313(1):19-40
DOI: https://doi.org/10.33119/GN/159033
 
 
Article (PDF)
Supplementary files
References (74)
 
KEYWORDS
public economics
crowding out
social security wealth
household wealth
wealth distribution
 
JEL CLASSIFICATION CODES
D14
D15
D31
H55
 
ABSTRACT
Economic theory does not give clear predictions on the impact of social security wealth on private wealth. While the basic life-cycle hypothesis predicts full displacement, many more advanced theoretical contributions anticipate only a limited offset. Empirical research on the issue is also not conclusive. In this paper, we measure the substitution between social security wealth and private wealth in Poland. To obtain measures of long-term substitution, we measure the displacement effects of social security wealth on net wealth. Our estimates of the effects on consumption and the saving rate reflect a short-term impact. Our results do not provide support for the hypothesis that social security wealth crowds out private savings in the long term. The short-term evidence is mixed, but the effects of social security wealth on consumption are at best weak, while the impact on saving rates is not statistically significant. In our view, in transition economies, the influence of social security wealth on private wealth is weaker than in developed economies because the wealth distribution has been to a large extent transformed by random and rapid events such as the privatisation of housing assets.
FUNDING
I gratefully acknowledge support by National Science Centre under contract UMO- 2019/35/N/HS4/01032.
 
REFERENCES (74)
1.
Alessie R., Angelini V., Van Santen P. [2013], Pension wealth and household savings in Europe: Evidence from SHARELIFE, European Economic Review, 63: 308–328.
Google Scholar
 
 
2.
Andersson L. F., Eriksson L. [2014], The compulsory public pension and the demand for life insurance: The case of Sweden, 1884–1914, Economic History Review, 68 (1): 244–263.
Google Scholar
 
 
3.
Attanasio O. P., Weber G. [2010], Consumption and Saving: Models of Intertemporal Allocation and Their Implications for Public Policy, Journal of Economic Literature, 48 (3): 693–751.
Google Scholar
 
 
4.
Aydede Y. [2007], Saving and Social Security Wealth: A Case of Turkey, Topics in Middle Eastern and North African Economics, 9.
Google Scholar
 
 
5.
Bach S., Thiemann A., Zucco A. [2019], Looking for the missing rich: tracing the top tail of the wealth distribution, International Tax and Public Finance, 26 (6): 1234–1258.
Google Scholar
 
 
6.
Bernheim B. D. [1987], The economic effects of social security: Toward a reconciliation of theory and measurement, Journal of Public Economics, 33 (3), 273–304.
Google Scholar
 
 
7.
Bönnke T., Grabka M., Schröder C., Wolff E. N. [2020], A Head-to-Head Comparison of Augmented Wealth in Germany and the United States, Scandinavian Journal of Economics, 122 (3): 1140–1180.
Google Scholar
 
 
8.
Bönnke T., Grabka M., Schröder C., Wolff E. N., Zyska L. [2019], The Joint Distribution of Net Worth and Pension Wealth in Germany, Review of Income and Wealth, 65 (4): 834–871.
Google Scholar
 
 
9.
Bottazzi R., Jappelli T., Padula M. [2006], Retirement Expectations, Pension Reforms, and Their Impact on Private Wealth Accumulation, Journal of Public Economics, 90 (2): 2187–2212.
Google Scholar
 
 
10.
Bricker S., Hanse P., Volz A. H. [2019], Wealth concentration in the U. S. after augmenting the upper tail of the survey of con¬sumer finances, Economics Letters, 184: 108659.
Google Scholar
 
 
11.
Brzeziński M., Sałach K. [2021], Factors that account for the wealth inequality differences between post-socialist countries, Economic Modelling, 105: 105649.
Google Scholar
 
 
12.
Brzeziński M., Sałach K., Wroński M. [2020], Wealth inequality in Central and Eastern Europe: Evidence from joined household survey and rich lists’ data, Economics of Transition and Institutional Change, 28 (4): 637–660.
Google Scholar
 
 
13.
Bucciol A. [2011], A note on social security welfare with self-control problem, Macroeconomic Dynamics, 15 (04): 579–594.
Google Scholar
 
 
14.
Bucks B. K., Pence K. M. [2015], Wealth, Pensions, Debt, and Savings: Considerations for a Panel Survey, Finance and Economics Dis¬cussion Series 2015-019, Board of Governors of the Federal Reserve System.
Google Scholar
 
 
15.
Cagan P. [1965], The Effect of Pension Plans on Aggregate Saving: Evidence from a Sample Survey, Occasional Paper 95, New York: Columbia Univ. Press [for NBER].
Google Scholar
 
 
16.
Cerda R. A. [2009], Social Security and Wealth Accumulation in Developing Economies: Evidence from the 1981 Chilean Reform, World Development, 36 (10): 2029–2044.
Google Scholar
 
 
17.
Cigno A., Casolaro L., Rosati F. C. [2002], The Impact of Social Security on Saving and Fertility in Germany, FinazArchiv, 59 (2): 189–211.
Google Scholar
 
 
18.
Cowell F., Nolan B., Olivera J., Van Kerm P. [2017], Wealth, Top Incomes, and Inequality, in: Hamilton K., Hepburn C. (eds.), National Wealth: What is Missing, Why it Matters, Oxford University Press, Oxford.
Google Scholar
 
 
19.
Czapiński J., Góra M. [2016], Świadomość „emerytalna” Polaków. Raport z badania ilościowego, Publikacje Europejskiego Kongresu Finansowego, Warszawa.
Google Scholar
 
 
20.
Deaton A. [1992], Understanding Consumption, Oxford University Press, Oxford.
Google Scholar
 
 
21.
De Nardi M., French E., Jones J. B. [2010], Why Do the Elderly Save? The Role of Medical Expenses, Journal of Political Economy, 118 (1): 9–75.
Google Scholar
 
 
22.
Engen E. M., Gale W. [1993], IRAs and Saving in a Stochastic Life Cycle Model, Brookings Institution, Washington.
Google Scholar
 
 
23.
Fehr H., Habermann C., Kindermann F. [2008], Social Security with Rational and Hyperbolic Consumers, Review of Economic Dynamics, 11 (4): 884–903.
Google Scholar
 
 
24.
Feldstein M. [1974], Social Security, Induced Retirement, and Aggregate Capital Accumulation, Journal of Political Economy, 82 (5): 905–926.
Google Scholar
 
 
25.
Feldstein M. [1976], Social Security and Saving: The Extended Life Cycle Theory, American Economic Review, 66 (2): 77–86.
Google Scholar
 
 
26.
Feng J., He L., Sato H. [2011], Public pension and household saving: Evidence from urban China, Journal of Comparative Econom¬ics, 39 (4): 470–485.
Google Scholar
 
 
27.
Fessler P., Schürz M. [2018], Private Wealth Across European Countries: The Role of Income, Inheritance and the Welfare State, Journal of Human Development and Capabilities, 19 (4): 521–549.
Google Scholar
 
 
28.
Gale W. G. [1998], The Effects of Pensions on Household Wealth: A Reevaluation of Theory and Evidence, Journal of Political Economy, 106 (4): 706–723.
Google Scholar
 
 
29.
HFCN [2020a], The Household Finance and Consumption Survey: Results from the 2017 wave, ECB Statistics Paper Series No. 36, European Central Bank.
Google Scholar
 
 
30.
HFCN [2020b], The Household Finance and Consumption Survey: Methodological report for the 2017 wave, ECB Statistics Paper Series No. 35, European Central Bank.
Google Scholar
 
 
31.
Honarvar S. S., Raghfar H., Mousavi M. [2017], Macroeconomic and Welfare Effects of Parametric Pension Reform in Iran, Journal of Money and Economy, 12 (4): 455–479.
Google Scholar
 
 
32.
Hubbard R. G. [1986], Pension Wealth and Individual Saving: Some New Evidence, Journal of Money, Credit and Banking, 18 (2): 167–178.
Google Scholar
 
 
33.
Hurd M. [1987], Savings of the Elderly and Desired Bequest, American Economic Review, 77 (3): 298–312.
Google Scholar
 
 
34.
Jabłonowski J. [2021], MPC out of Augmented Wealth in Poland, Central European Journal of Economic Modelling and Econometrics, 2021 (3), 253–286.
Google Scholar
 
 
35.
Johnson P. [1984], Self-Help versus State Help: Old Age Pensions and Personal Savings in Great Britain, 1906–1937, Explorations in Economic History, 21 (4): 329–350.
Google Scholar
 
 
36.
Katona G. [1965], Private pensions and individual savings, Ann Arbor: University of Michigan.
Google Scholar
 
 
37.
Kennickell A. B. [2017a], Getting to the top: Reaching wealthy respondents in the SCF, Statistical Journal of the IAOS, 33 (1): 113–123.
Google Scholar
 
 
38.
Kennickell A. B. [2017b], Try, try again: Response and nonresponse in the 2009 SCF panel, Statistical Journal of the IAOS, 33 (1): 203–209.
Google Scholar
 
 
39.
Kennickell A. B., McManus D. A. [1993], Sampling for household financial characteristics using frame information on past income, paper presented at the 1993 Joint Statistical Meeting, Atlanta (GA), August.
Google Scholar
 
 
40.
Kessler D., Masson A., Strauss-Kahn D. [1981], Social Security and Saving: A Tentative Survey, Geneva Papers on Risk and Insur¬ance, 18 (1): 3–50.
Google Scholar
 
 
41.
Kohl R., O’Brien P. [1998], The Macroeconomic of Ageing, Pensions and Savings: A Survey, Economic Department Working Paper No. 200, OECD, Paris.
Google Scholar
 
 
42.
Lachowska M., Myck M. [2018], The Effect of Public Pension Wealth on Saving and Expenditure, American Economic Journal: Economic Policy, 10 (3): 284–308.
Google Scholar
 
 
43.
Lehmann-Hasemeyer S., Streb J. [2018], Does Social Security Crowd Out Private Savings? The Case of Bismarck’s System of Social Insurance, European Review of Economic History, 22 (3): 298–321.
Google Scholar
 
 
44.
Low L., Heng T. M., Kapur B. K. [1986], Survey on Theoretical Issues and Evidence on Social Security [with Comment], ASEAN Economic Bulletin, 3 (1): 11–34.
Google Scholar
 
 
45.
Lusardi A., Mithcell O. S. [2014], The Economic Importance of Financial Literacy: Theory and Evidence, Journal of Economic Literature, 52 (1): 5–44.
Google Scholar
 
 
46.
Magnussen K. A. [1994], Old-Age Pensions, Retirement Behaviour and Personal Saving. A Discussion of the Literature, Social and eco¬nomic studies 087, Statistics Norway, Oslo.
Google Scholar
 
 
47.
Mayer T. [1972], Permanent Income, Wealth, and Consumption. A Critique of the Permanent Income Theory, the Life-Cycle Hypothesis, and Related Theories, University of California Press, Berkeley.
Google Scholar
 
 
48.
Meriküll J., Rõõm T. [2021], Are survey data underestimating the inequality of wealth?, Empirical Economics, online first.
Google Scholar
 
 
49.
Mirer T. W. [1992], Life-cycle valuation of social security and pension wealth, Journal of Public Economics, 48 (3): 377–384.
Google Scholar
 
 
50.
Modigliani F. [1986], Life Cycle, Individual Thrift, and the Wealth of Nations, American Economic Review, 76 (3): 297–313.
Google Scholar
 
 
51.
Modigliani F., Sterling A. [1983], Determinants of private saving with special reference to the role of social security – cross coun¬try tests, in: Modigliani F., Hemming R. (eds.), The Determinants of National Saving and Wealth: 24–55, Macmillan, London.
Google Scholar
 
 
52.
NBP [2017a], Zasobność gospodarstw domowych w Polsce, Narodowy Bank Polski, Warszawa.
Google Scholar
 
 
53.
NBP [2017b], Zasobność gospodarstw domowych w Polsce. Aneks metodyczny do badania z 2016 r., Narodowy Bank Polski, Warszawa.
Google Scholar
 
 
54.
OECD [2013], OECD Guidelines for Micro Statistics on Household Wealth, OECD Publishing.
Google Scholar
 
 
55.
OECD [2019], Pensions at a Glance 2019, OECD Publishing.
Google Scholar
 
 
56.
Oliviera J. [2018], The distribution of pension wealth in Europe, Journal of Economics of Ageing, 13: 30–42.
Google Scholar
 
 
57.
Rubin D. B. [1987], Multiple Imputation for Nonresponse in Surveys, John Wiley & Sons, New York.
Google Scholar
 
 
58.
Rutkowski A. [2019], Evaluating an old-age voluntary saving scheme under incomplete rationality, Gospodarka Narodowa. The Polish Journal of Economics, 3 (299): 55–94.
Google Scholar
 
 
59.
Schröder J. [1983], Social security and the macroeconomic saving-income ratio, Weltwirtschaftliches Archiv, 119: 554–568.
Google Scholar
 
 
60.
Sierminska E., Wroński M. [2022], Inequality and Public Pension Entitlements, in: Zimmermann K. F. (ed.), Handbook of Labor, Human Resources and Population Economics (forthcoming), Springer, Cham.
Google Scholar
 
 
61.
Thaler R. H. [1990], Anomalies: Saving, Fungibility, and Mental Accounts, Journal of Economic Perspectives, 4 (1): 193–205.
Google Scholar
 
 
62.
Thaler R. H. [1999], Mental accounting matters, Journal of Behavioral Decision Making, 12 (3): 188–206.
Google Scholar
 
 
63.
Tyrowicz J., Makarski K., Rutkowski A. [2020], Fiscal incentives to pension savings – are they efficient? Working Paper 20/06, Rimini Center for Economic Analysis, Waterloo.
Google Scholar
 
 
64.
Vermeulen P. [2016], Estimating the Top Tail of the Wealth Distribution, American Economic Review, 106 (5): 646–650.
Google Scholar
 
 
65.
Vermeulen P. [2018], How Fat is the Top Tail of the Wealth Distribution?, Review of Income and Wealth, 64 (2): 357–387.
Google Scholar
 
 
66.
Wolff E. N. [2015], U. S. Pensions in the 2000s: The Lost Decade?, Review of Income and Wealth, 61 (4): 599–629.
Google Scholar
 
 
67.
Wolff E. N. [2017], The Retirement Wealth of the Baby Boom Generation, Journal of Monetary Economics, 54 (1): 1–40.
Google Scholar
 
 
68.
Wolff E. N., Marley M. [1989], Long-Term Trends in U. S. Wealth Inequality: Methodological Issues and Results, in: Lipsey R. E., Tice H. S. (eds.), The Measurement of Saving, Investment, and Wealth, Studies in Income and Wealth, National Bureau of Economic Research and University of Chicago, Chicago.
Google Scholar
 
 
69.
Wroński M. [2019], Kluczowe problemy metodologiczne w badaniach nad majątkiem gospodarstw domowych, Wiadomości Sta¬tystyczne, 5 (696): 34–47.
Google Scholar
 
 
70.
Wroński M. [2020], Multidimensional Inequality in the European Union, The Joint Distribution of Household Income, Wealth and Consumption, Economics & Sociology, 14 (3): 205–219.
Google Scholar
 
 
71.
Wroński M. [2021a], Does Social Security Crowd out Private Wealth? A Survey of the Literature, available at SSRN: https://ssrn.com/abstract=3839....
Google Scholar
 
 
72.
Wroński M. [2021b], Wpływ uprawnień w publicznym systemie emerytalnym na rozkład majątku gospodarstw domowych w Polsce, unpublished doctoral dissertation.
Google Scholar
 
 
73.
Wroński M. [2023a], The impact of the public pension system on wealth inequality. The distribution of augmented wealth in Poland, Applied Economics Letters, 30 (3): 355–359.
Google Scholar
 
 
74.
Wroński M. [2023b], The Impact of Social Security Wealth on the Distribution of Wealth in the European Union, Journal of Economics of Ageing, in press.
Google Scholar
 
 
Share
Send by email
RELATED ARTICLE
Crowding Out of Informal Economy Labour Supply by Unconditional Child Benefits
The Concept of Household Wealth: Estimates for Poland
Indexes
 
Keywords index
JEL Classification Codes index
Authors index
eISSN:2300-5238
Journals System - logo
The system was developed as part of the task "Digitization of the journal Gospodarka Narodowa," financed under contract 555/P-DUN/2018 from the Ministry of Science and Higher Education funds allocated from the dissemination of science.

© 2006-2024 Journal hosting platform by Bentus
Scroll to top