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Why do people invest in personal pension plans?

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Abstract:

The aim of this article is to identify the variables affecting the decision to make contributions to personal pension plans and the amount of such contributions. For this purpose, we specify and estimate a Tobit model for a sample based on the 1995 Personal Income Taxpayers Panel prepared by the Institute of Fiscal Studies (Spanish Ministry of Economy and Finance) formed by 3041 taxpayers, of whom 358 made contributions to pension plans. Our results suggest that individuals decide to invest in pension plans on complex grounds combining the wish to benefit from tax savings and to ensure they will receive supplementary income upon retirement.

Document Type: Research Article

DOI: https://doi.org/10.1080/00036840500461956

Affiliations: Department of Public Economics, University of Zaragoza, 50 005-Zaragoza, Spain

Publication date: 2007-05-01

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