Torben M Andersen, Joydeep Bhattacharya, Anna Grodecka-Messi, Katja Mann, 05 May 2022

Retirement saving is at the centre of the debate on rising income and wealth inequality. This column studies the role of the pension system in wealth accumulation and distribution in Denmark. The authors find that a pension reform in the late 1980s increased the savings rate and aggregate pension assets significantly by introducing mandated funded pensions. Moreover, it has had an equalising effect on the wealth distribution. The findings illustrate the importance of pension system design for the level and distribution of wealth. 

Jonas Kolsrud, Camille Landais, Daniel Reck, Johannes Spinnewijn, 22 March 2022

Over the past two decades, many countries have reformed their public pension systems in pursuit of desirable fiscal effects, often by introducing or strengthening incentives for later retirement. However, the welfare effects of such interventions are still poorly understood. Using Swedish administrative data, this column uncovers significant redistributive costs of pension reforms that incentivise later retirement, especially when it comes to incentivising later retirement at very early and late retirement ages. Policymakers should consider not only the fiscal benefits of incentivising later retirement, but also the redistributive costs.

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