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Saving and Investing Over the Life Cycle and the Role of Collective Pension Funds

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  • Published: 09 October 2007
  • Volume 155, pages 347–415, (2007)
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Saving and Investing Over the Life Cycle and the Role of Collective Pension Funds
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  • Lans Bovenberg1,
  • Ralph Koijen1,
  • Theo Nijman1 &
  • …
  • Coen Teulings2 

  • 5213 Accesses

  • 74 Citations

  • 3 Altmetric

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Summary

This paper surveys the academic literature on optimal saving and investment over an individual’s life cycle. We start out with a simple benchmark model with separable and smooth preferences, one aggregate risk factor and riskless wage income. Within this simple setting, optimal saving and investment behavior are explored from the perspective of individuals. Subsequently, we investigate various constraints to optimal individual decision making. We discuss how collective pension schemes may help to relieve some of the market incompleteness that arises from these constraints while at the same time introducing new types of constraints. Finally, various extensions to the benchmark setting are analyzed: a more elaborate modelling of human capital, additional risk factors, and other types of preferences.

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Authors and Affiliations

  1. Netspar and Tilburg University, P.O. Box 90153, 5000 LE, Tilburg, The Netherlands

    Lans Bovenberg, Ralph Koijen & Theo Nijman

  2. Netspar and University of Amsterdam, Roetersstraat 29, 1018 WB, Amsterdam, The Netherlands

    Coen Teulings

Authors
  1. Lans Bovenberg
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  2. Ralph Koijen
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  3. Theo Nijman
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  4. Coen Teulings
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Corresponding author

Correspondence to Theo Nijman.

Additional information

We thank Peter Kooreman for helpful comments on an earlier version and Roel Mehlkopf for research assistance.

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Open Access This is an open access article distributed under the terms of the Creative Commons Attribution Noncommercial License ( https://creativecommons.org/licenses/by-nc/2.0 ), which permits any noncommercial use, distribution, and reproduction in any medium, provided the original author(s) and source are credited.

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Bovenberg, L., Koijen, R., Nijman, T. et al. Saving and Investing Over the Life Cycle and the Role of Collective Pension Funds. De Economist 155, 347–415 (2007). https://doi.org/10.1007/s10645-007-9070-1

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  • Published: 09 October 2007

  • Issue Date: December 2007

  • DOI: https://doi.org/10.1007/s10645-007-9070-1

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Key words

  • saving
  • investment
  • life cycle
  • pension schemes
  • defined contribution
  • defined benefit

JEL Code(s)

  • D91
  • G11
  • G23
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