Zant, W. (1988). Social security wealth and aggregate consumption: An extended life-cycle model estimated for The Netherlands De Economist, 136(1):136--153.
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Affiliated author
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Publication year1988
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JournalDe Economist
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.