Social security wealth and aggregate consumption: An extended life-cycle model estimated for The Netherlands

W. Zant

doi:10.1007/BF02078542

Social security wealth and aggregate consumption: An extended life-cycle model estimated for The Netherlands

W. Zant^*

^*Corresponding author for this work

Research output: Contribution to Journal › Article › Academic › peer-review

Abstract

In this paper a method is developed to calculate a wealth variable accounting for the existence of the basic old-age provisions in The Netherlands (AOW). In line with Feldstein's extended life-cycle model, consumption functions with (gross) social security wealth are estimated for The Netherlands for the period 1957-1986. The marginal propensity to consume social security wealth is statistically significant in the applied specifications. The data favour the use of an age- and period-dependent discount rate. The results compare relatively well with the consumption equations in the models of the Central Planning Bureau and De Nederlandsche Bank.

Original language	English
Pages (from-to)	136-153
Number of pages	18
Journal	Economist
Volume	136
Issue number	1
DOIs	https://doi.org/10.1007/BF02078542
Publication status	Published - Mar 1988

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abstract = "In this paper a method is developed to calculate a wealth variable accounting for the existence of the basic old-age provisions in The Netherlands (AOW). In line with Feldstein's extended life-cycle model, consumption functions with (gross) social security wealth are estimated for The Netherlands for the period 1957-1986. The marginal propensity to consume social security wealth is statistically significant in the applied specifications. The data favour the use of an age- and period-dependent discount rate. The results compare relatively well with the consumption equations in the models of the Central Planning Bureau and De Nederlandsche Bank.",

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AB - In this paper a method is developed to calculate a wealth variable accounting for the existence of the basic old-age provisions in The Netherlands (AOW). In line with Feldstein's extended life-cycle model, consumption functions with (gross) social security wealth are estimated for The Netherlands for the period 1957-1986. The marginal propensity to consume social security wealth is statistically significant in the applied specifications. The data favour the use of an age- and period-dependent discount rate. The results compare relatively well with the consumption equations in the models of the Central Planning Bureau and De Nederlandsche Bank.

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Social security wealth and aggregate consumption: An extended life-cycle model estimated for The Netherlands

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