@techreport{5fd180c6da034232a4432b224ec92d20,
title = "Pension Reform and Wealth Inequality: Evidence from Denmark",
abstract = "A growing literature explores reasons for rising wealth inequality, but disregards the role of pension systems despite their well-understood influence 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 differ 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.",
keywords = "Wealth inequality, Pension systems, Crowding out, Life-cycle savings, Wealth inequality, Pension systems, Crowding out, Life-cycle savings",
author = "Andersen, {Torben M.} and Joydeep Bhattacharya and Anna Grodecka-Messi and Katja Mann",
year = "2022",
month = feb,
language = "English",
series = "Centre for Economic Policy Research. Discussion Papers",
publisher = "Centre for Economic Policy Research",
number = "DP17078",
address = "United Kingdom",
type = "WorkingPaper",
institution = "Centre for Economic Policy Research",
}