Learning to save in a voluntary pension system: toward an agent-based model

  • Balázs Király
  • András SimonovitsEmail author
Regular Article


Mandatory pension systems partially replace old-age income, therefore the government matches additional life-cycle savings in a voluntary pension system. Though the individual saving decisions are apparently independent, the earmarked taxes (paid to finance the matching) connect them. Previous models either neglected the endogenous tax expenditures (e.g. Choi et al., in: Wise (ed) Perspectives in the economics of aging, University of Chicago Press, Chicago, pp 81–121, 2004) or assumed very sophisticated saving strategies (e.g. Fehr et al. in FinanzArchiv Pub Finance Anal 64:171–198, 2008). We create twin models: myopic workers learn (i) from farsighted workers using public information (analytic model) and (ii) also from each other (agent-based model). These models provide more realistic results on saving behavior and the impact of matching on the income redistribution than the earlier models.


Life-cycle savings Overlapping generations Mandatory pensions Voluntary pensions Agent-based models 

JEL Classification

D91 H55 



We thank Cars Hommes, Botond Kőszegi, Gergely Varga, Tamás Vicsek, János Vincze and the anonymous referees of this Journal for their useful comments, especially for calling our attention to the imperfect formulation of the transition from zero to positive matching in Király and Simonovits (2016) which is longer and can be found on the web. We express our gratitude for the generous grant of the Hungarian Research Foundation (OTKA) under grant number 108668.

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Copyright information

© Springer-Verlag GmbH Germany, part of Springer Nature 2018

Authors and Affiliations

  1. 1.Institute of PhysicsBudapest University of Technology and EconomicsBudapestHungary
  2. 2.Institute of Economics, CERSHungarian Academy of Sciences also Mathematical Institute, Budapest University of Technology and EconomicsBudapestHungary

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