Augmented wealth in Switzerland: the influence of pension wealth on wealth inequality

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Version: Final published version
License: CC BY 4.0
Serval ID
serval:BIB_B562878B7716
Type
Article: article from journal or magazin.
Collection
Publications
Institution
Title
Augmented wealth in Switzerland: the influence of pension wealth on wealth inequality
Journal
Swiss Journal of Economics and Statistics
Author(s)
Kuhn Ursina
ISSN
2235-6282
Publication state
Published
Issued date
12/2020
Volume
156
Number
1
Language
english
Abstract
Entitlements for social security and occupational pensions present a major wealth component and play a central role for financial security. However, most individual-level data lacks information on pension wealth. By linking various data sources, this contribution estimates the present value of future pension entitlements in Switzerland for statutory pensions, occupational pensions and third pillar accounts and analyses the distribution of augmented wealth, which combines pension wealth and net worth. The CH-SILC survey from 2015 is used to estimate real assets, financial assets and pension wealth of retired individuals. The pension entitlements of non-retired individuals are simulated on the basis of their earning history from administrative records following the accrual method and assuming a real discount rate of 2%. When pension wealth is added to net worth, average wealth doubles, and the Gini-coefficient declines by 26%. The equalising effect is particularly strong for social security pensions. The wealth distribution differs strongly between the three pillars of the pension system; there are also strong differences between gender and age groups. In Switzerland, wealth accumulation continues after retirement age.
Keywords
net worth, augmented wealth, pension wealth, wealth inequality, life curse, SILC ,Data linkage
Open Access
Yes
Funding(s)
Swiss National Science Foundation / 10001AL_166319
Create date
09/11/2020 9:46
Last modification date
27/11/2020 8:10
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