Effects of the Introduction of a Funded Pillar on the Russian Household Savings: Evidence from the 2002 Pension Reform

by Irina Kovrova; WP CERP 61/07




This paper provides an estimation of the effects of the introduction of a mandatory funded pillar on households’ savings. To this purpose, I exploit the 2002 Russian pension reform that introduced a funded component along the pay-as-you-go one. The empirical evidence shows that the introduction of the funded pillar has a negative impact on the Russian households’ savings. I find that the introduction of the funded pillar entails a reduction of 1 percentage point in the saving rates of households who save and a reduction of 2.5 percentage points in the probability of having positive savings.


June 2007


WP_61.pdf (PDF document — 659 KB)