Overview

Abstract (English)

Due to population aging and to the financial crisis of social security system, many developed countries start to consider providing compulsory private pension. This paper examines the effect of compulsory private pension on household saving by exploiting 2005 Taiwanese pension reform, which forced private sector employers to give 6 percent of employees’ wage as pension. The results suggest that the mandatory employer-provided pension significantly reduce household savings and that the degree of substitution between private pension and saving is about 41 to 67 percent. Since pension saving only offset half of household saving, this compulsory private pension policy could substantially increase household’s retirement savings in Taiwan.

Abstract (French)

Please note that abstracts only appear in the language of the publication and might not have a translation.