انتظارات بازنشستگی، اصلاحات بازنشستگی، و تأثیر آنها بر انباشت ثروت خصوصی

We estimate the effect of pension reforms on households' expectations of retirement outcomes and private wealth accumulation decisions exploiting a decade of intense Italian pension reforms as a source of exogenous variation in expected pension wealth. The Survey of Household Income and Wealth, a large random sample of the Italian population, elicits expectations of the age at which workers expect to retire and of the ratio of pension benefits to pre-retirement income between 1989 and 2002. We find that workers have revised expectations in the direction suggested by the reform and that there is substantial offset between private wealth and perceived pension wealth, particularly by workers that are better informed about their pension wealth.

In all industrialized countries pension benefits represent a major component of retirement income, and therefore social security arrangements can have important effects on households' intertemporal choices. One of the most important issues in this area is to what extent individuals perceive and react to changes in pension legislation. Is private wealth a good substitute for mandated accumulation in the form of social security contributions? Do people increase their saving and labor supply in response to a reduction in pension benefits? Answers to these questions usually proceed in two steps. In a first step, researchers estimate expected pension wealth, that is, the expected present discounted value of future benefits that workers are entitled to. In a second step, expected pension wealth is related to discretionary wealth and/or labor supply behavior. Even in the simplest scenarios, estimating future pension benefits is a difficult task. For the working population, expected pension wealth depends, among other variables, on the age at which workers expect to retire and on the expected ratio of pension benefits to pre-retirement earnings (the replacement rate). The standard approach taken in the literature is to estimate these variables from current and projected legislation on pension eligibility rules, accrual rates of contributions, productivity growth and mortality projections. In this paper we instead take a different approach: we compute expected pension wealth by using individual expectations of retirement age and replacement rate. The Survey of Household Income and Wealth (SHIW), a large representative survey of the Italian population carried out by the Bank of Italy, elicits retirement age and replacement rate expectations from 1989 to 2002. This is not the only survey eliciting such expectations but, to our knowledge, it is the only survey in which this information is available for an extended period spanning a set of intense pension reforms. During the period, the Italian government enacted three reforms (in 1992, 1995, and 1997), whose ultimate effect was to increase the retirement age and to reduce the replacement rate of young workers relative to older cohorts. The availability of individual expectations enables us to assess the degree of workers' information by comparing the expected replacement rate to a replacement rate computed with the relevant pension legislation (for a given retirement age). Moreover, the pension reforms that take place in the observation period provide us with the opportunity to estimate the impact of these reforms on individual expectations. In particular, we can analyze whether the groups most affected by the reforms have perceived these changes correctly. Believing in the importance of subjective expectations to determine individual decisions, we use subjective expectations of retirement age and replacement rate to construct a measure of expected pension wealth and we relate it to discretionary wealth. We then show that the relationship between expected pension wealth and discretionary wealth differs according to the degree of individual information about pension legislation and the changes implied by the reform. The standard life-cycle hypothesis posits that a change in expected pension benefits should offset private wealth one-for-one. This offset is what Feldstein (1974) calls the substitution effect—pension wealth crowds out discretionary wealth. There are several potential counter-effects to a complete crowding out. Bequest motives, short-sightedness, liquidity constraints, risk associated with future reforms, and non-marketable future benefits are among the most cited reasons to explain why the offset between private and pension wealth might well be less than one-for-one. But there is another element that plays a major role in our analysis: individual information about pensions. Information might be especially important at times of pension reforms, because people might not immediately understand how the reform will affect their benefits or because changes in expectations occur slowly. Feldstein (1974) and Feldstein and Pellechio (1979) pioneered the analysis of the displacement effect of pension wealth on national saving using U.S. time series and microeconomic data, respectively. Since then, a growing literature has used individual level data to provide evidence on the degree of substitution between discretionary accumulation and pension wealth in the U.S. and other countries imputing pension wealth from legislation (see Gale, 1998 and Bernheim, 2002). Existing microeconometric evidence suggests that pension wealth crowds out discretionary wealth, but at a rate of considerably less than one-for-one. Other related and influential research looks at how pension entitlements affect retirement and labor participation decisions of the elderly, and simulates the effects of policy reforms (see Gruber and Wise, 1999 and Gruber and Wise, 2004). Using SHIW data for the years 1989–1995, Attanasio and Brugiavini (2003) exploit the changes in pension wealth across cohorts and employment groups induced by the 1992 Italian pension reform. They model the response of the change in private wealth relative to income (the saving rate) to the level of social security wealth relative to income. This amounts to assuming that saving changes permanently when social security wealth changes. In the long run, this implies a very large effect of a pension reform on private wealth. In this paper, we take the standard approach and relate the level of private wealth (relative to income) to the level of social security wealth (relative to income). We look at the combined impact of three pension reforms (1992, 1995 and 1997) and rely on an estimate of pension wealth based on the expected retirement age and expected replacement rate, rather than computed from legislation. Given the nature of our data, we are able to distinguish the effect of pension reforms on workers' expectations, and the effect of expectation revisions on discretionary wealth. This distinction proves to be an important one for estimating the offset between pension wealth and discretionary wealth, since this offset is stronger among workers with more accurate expectations of pension provisions than among those with less accurate expectations. In this sense, our contribution adds significantly to the debate on individual savings decisions in relation to pension reforms by highlighting the importance of information and expectation errors about pension provisions. To the extent that expectations will eventually fully adjust to the new pension regime, the offset estimated for the group of workers with more accurate expectations gives us an estimate of the long run change in the stock of private wealth. The paper is therefore also closely related to the literature that analyzes the accuracy of subjective expectations of retirement age and social security benefits (see Bernheim, 1990, Disney and Tanner, 1999, Dominitz et al., 2002 and Gustman and Steinmeier, 2005). This literature has been concerned with a set of issues, which are, to a large extent, preliminary to the analysis of the effect of pension wealth on private wealth accumulation. Specifically, it analyses the degree of workers' knowledge of retirement benefits they are entitled to, the relation between planned and actual retirement age, and the determinants of the probability distribution of expected retirement age. The paper is organized as follows. Section 2 illustrates the Italian pension reforms of the last decade and discusses previous evidence. Section 3 presents the data on expectations of retirement outcomes available in the 1989–2002 SHIW and estimates the impact of pension reforms on the expected retirement age and replacement rate, exploiting the variation in the impact of the legislation changes on different demographic and economic groups. We also evaluate the accuracy of pension expectations by comparing the expected replacement rate with a statutory rate. We find that, on average, the expectation error of the replacement rate is about 3 percentage points, but for 14% of the sample the expected replacement rate underestimates or overestimates the statutory rate by at least 25 percentage points. After the three pension reforms there has been an increase in expectation errors, particularly for the groups most affected by the reforms. Workers have revised expectations in the direction suggested by the reform, but the adjustment is far from complete. Section 4 relates discretionary wealth to a measure of expected pension wealth constructed with expectation data. The empirical estimates suggest an offset between private wealth and expected pension wealth of about 50%. This, however, results from considerable differences between “informed” and “uninformed” workers: the offset coefficient is between − 0.4 and − 0.8 in the former group, and between − 0.2 and − 0.4 in the latter. Section 5 concludes by drawing attention to the crucial role of financial information and suggesting that in the coming decades a problem of inadequate savings could emerge for the cohorts most affected by the reforms and, within this group, for those who are less informed about pension rules.

The Survey of Household Income and Wealth, a large representative sample of the Italian population, elicits expectations of replacement rates from workers interviewed in the years between 1989 and 2002, a period of intense pension reforms. The reforms reduced replacement rates and increased retirement ages, and had different impacts on different cohorts and employment groups. This exogenous variation in replacement rates allows us to study the effect of pension reforms on expectations, and how changes in expected social security wealth were reflected in private wealth accumulation decisions. We find that pension reforms indeed affected expectations of retirement benefits. However, the revision in expectations is limited, and many individuals have still not completely updated their expectations. For instance, while the perceived replacement rate of the self-employed falls by about 10 percentage points between 1989–1991 and 2000–2002, in reality the rate falls by about 20 points. Moreover, the offset between pension wealth and expected private wealth is only partial, in the order of 30% in the total sample (60% in the IV estimation). Most importantly, the offset coefficient is higher for people that are more informed about their future benefits. Once expectations adjust fully to the new rules, the offset between private wealth and pension wealth is likely to be higher. This suggests that the effect of pension reform depends critically on the extent of the knowledge and information that individuals have about the social security system and changes to it, and has three important policy implications. First, the descriptive and econometric analysis implies that some workers lack information to fully understand pension rules, thus making a case for investing public resources in the dissemination of information about pension rights, especially during periods of intense reform. Campaigns to increase financial literacy and the understanding of pension rules, and to provide individuals with regular statements of their expected retirement income, are important steps in this direction.26 Second, the paper suggests that if one wants to use observations of past pension reforms to make predictions about likely responses to new reforms, then one needs to estimate how responses in the past were limited by inaccurate updating of expectations, and how the new reform will affect expectations. Finally, given the dramatic reduction in replacement rates implied by the pension reform, combined with an incomplete offset between pension wealth and private wealth, it is likely that some individuals, especially the younger cohorts most affected by the reform, might not be saving enough for their old age. This might have a long-term impact on the well being of future retirees in the coming decades, when the generations affected by the pension reform will start to retire.