Pension Reform and Wealth Inequality: Evidence from Denmark

Torben M. Andersen, Joydeep Bhattacharya, Anna Grodecka-Messi, Katja Mann*

*Corresponding author af dette arbejde

Publikation: Working paperForskning


A growing literature explores reasons for rising wealth inequality, but disregards the role of pension systems despite their well-understood inuence on life-cycle saving. In theory and according to available evidence, both pay-as-you-go (PAYG) and fully-funded (FF) pension schemes crowd out voluntary retirement saving. They dier because aggregate savings decrease in the former but increase under the latter system. Unlike most nations, Denmark has seen a decline in wealth inequality in recent decades. This paper studies a calibrated life-cycle model of Denmark and employs unique registry data to argue that a Danish pension system transition, from a mostly PAYG to a dominant, mandated FF scheme, explains much of this decline
UdgiverSveriges Riksbank
Antal sider58
StatusUdgivet - 2022
NavnWorking Paper Series / Sveriges Riksbank


  • Wealth inequality
  • Pensions systems
  • Crowding out
  • Life-cycle savings