Prize for best thesis in labour market economics
CEBI PhD Camilla Skovbo Christensen is honoured in the Ministry of Employment for her thesis, ”Retirement Policies and Private Savings Behavior: Evidence from a Reform of the Old-Age Pension Scheme” with co-author Bastian Emil Ellegaard. They win the prize for best thesis within labour market economics in 2020 – and 25,000DKK
The thesis investigates whether tax incentives for pension savings affect the total savings. This question has long been an important and unanswered question within economics because of 1) lack of data documenting savings both inside and outside the pension system, and 2) credible research designs. Previous studies show that tax incentives for pension savings do not increase the total savings. However, they only analyze tax policies that primarily affect people with high incomes, and very little is known about how tax subsidies affect people further down the income distribution.
Camilla and Bastian solve this challenge by analyzing a change in the so-called age savings in 2017. Bastian and Camilla very creatively utilize the changed rules to develop three different research designs. The results of their analyzes show that for the group of people who are affected by the changed rules, there are actually no signs of full crowding-out, i.e, that the tax incentives affect the total savings. This is important new knowledge, which gives us a much more nuanced picture than what could be deduced from the previous studies.
The results have direct relevance to the design of the incentive structure in the pension system. The study also contributes to the academic literature in the field by showing that tax incentives for pension savings for some groups actually have a stimulating effect towards increasing people's total savings.