MPC out of Augmented Wealth in Poland

• Autorzy: Janusz Jabłonowski
• Języki publikacji: EN

Abstrakty

EN

The study attempts to link the descriptive economics with the theoretical model of permanent income and life cycle hypothesis (PILCH) to shed some light on a low private savings rate for Polish households. These may be explained by the households' belief that the public pension are a collateral to borrow against, which could discourage the buffer stock effect. The study comprises two research fields: 1) the estimation of so called augmented wealth, and, 2) the marginal propensity to consume (MPC) out of different types of wealth with the permanent income model. The mean augmented wealth (i.e. net wealth plus public pension wealth) per household in PLN amounted to 705 thousands, consisting of public pension wealth of 388 thousands and net wealth of 415 thousands. The model perfectly matches the augmented wealth Lorenz curve. The average MPC out of all types of wealth reaches 10% on average, ranging 6-20%, with a negative MPC to wealth correlation, and 60% of hand-to-mouth households. The explanation for this perfect match may stem from a high wage growth (also public pension contributions wedge) that that builds the public pension wealth. The Ricardian-type households may then mentally account the future pensions as a collateral (fiduciary money) for current high MPC, which may implicate crowding out their propensity to save for retirement privately. (original abstract)

Słowa kluczowe

EN

Household savings; Pensions

PL

Oszczędności gospodarstw domowych; Emerytury

• Czasopismo: Central European Journal of Economic Modelling and Econometrics (CEJEME)
• Rocznik: 2021
• Tom: 13
• Numer: nr 3
• Strony: 253--286

Twórcy

autor

Janusz Jabłonowski

• SGH Warsaw School of Economics, Warsaw, Poland

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Identyfikatory

DOI

10.24425/cejeme.2021.139798