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Key Findings Details

The Displacement Effect of Public Pensions on the Accumulation of Financial Assets
Michael Hurd, Pierre-Carl Michaud and Susann Rohwedder
WP 2009-212

  • The generosity of public pension systems affects both private saving rates and the timing of retirement.
  • Our study of 12 countries shows that generous public pensions depress lifetime asset accumulation.
  • For every dollar of pension wealth, financial assets are reduced by 23 to 44 cents.
  • Higher public pension levels also induce earlier retirement.
  • Retirement comes one month earlier for every $10,000 of pension wealth.