Abstract
ABSTRACT While various studies have shown the influence of pension plans on saving rates in different countries, the relationship between lending and pension wealth has been under-explored. This paper thus aims to analyse the impacts of saving rate and net lending on pension funds in OECD countries. For this purpose, we employ a panel data analysis from 27 OECD countries over an 11-year period from 2011 to 2021. Results from fixed effects regression models show a negative association between savings rate and pension contributions as well as pension benefits paid. In addition, net lending does not seem to have any significant influence on pension fund revenues, however, there is a slight positive impact on pension benefits paid. Finally, we show that our results are robust even after controlling for various socio-economic and demographic factors. The findings of our study have significant implications for policy design, particularly in relation to the incentives provided by policymakers to improve pension sustainability. Policymakers may offer interest rate reductions or direct substitutes for savings and lending to encourage individuals to contribute to the pension funds.
Published Version
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