Sweden in the LWS

1
Sweden in the LWS

• Lennart Berg and Henry Ohlsson
• Uppsala University
• 8 December 2006
• Prepared for the LWS Conference
• 14-15 December 2006

2
LWS-SE

• Sweden is
• poorer than the other LWS countries
• more unequal than, e g, the US

3
Top wealth shares in Sweden top 1 (P99-100) and
next 9 (P90-99), 1800-2003
Source Ohlsson, Roine Waldenström (2006),
Figure 7.
4
Wealth concentration in Sweden 2002, percent
5
Missing balance sheet items

• Health status, head, spouse (HLTHH, HLTHS)
• Age of parents, head, spouse (AGMH, AGFH, AGMS,
  AGFS)
• Inheritances received (INH, YRINH)
• Business debt, business equity (BD, BE)
• Vehicles (VH)
• Durables, collectibles (DRCL)
• Expenditures

6
Underreported balance sheet items

• Deposit accounts (DA)
• Foreign assets
• Self-employeds working capital
• BELINDA

7
LWS and Sweden

• Technical reserves for private and occupational
  pension schemes are missing in Swedish wealth
  data and for the corresponding LWS dataset
• Neglecting this two variables give incorrect
  results about the level for and (probably)
  distribution of wealth for Swedes
• OECD calculations of net and gross replacement
  rates of pension schemes and pension wealth to
  earnings are well above the average for Sweden,
  Finland and Norway

8
LWS and Sweden

• Three pillars pension system
• Social security
• Basic pension DB
• Income pension NDC
• Premium pensions DC
• Occupational pension schemes (almost) DC
• Private life insurance policy
• Private pension insurance annuity plans DC
• Endowment insurance DC

9
LWS and Sweden

• Three pillars pension system
• Social security
• Basic pension DB
• Income pension NDC
• Premium pensions DC
• More than 2 millions receive pensions
• Occupational pension schemes (almost) DC
• 90 of LF participate (LF 4½ millions)
• Private life insurance policy
• Private pension insurance annuity plans DC
• Endowment insurance DC
• 2 millions saves and ½ million get pay outs

10
LWS and Sweden

• Three pillars pension system
• Social security
• Basic pension DB
• Income pension NDC
• Premium pensions DC
• Aggregate and cross section data available
• Occupational pension schemes (almost) DC
• Aggregate data available
• Private life insurance policy
• Private pension insurance annuity plans DC
• Endowment insurance DC
• Aggregate data available

11
LWS and Sweden
12
LWS and Sweden

• Can pension wealth data be included in the
  Swedish survey and consequently in the LWS
  database?
• Social security Social Insurance Office has
  previously admitted to merge data from its
  register with Statistics Swedens yearly
  cross-section wealth survey for research
  purposes.
• Data for private and occupational pension schemes
  might be harder to get
• Run by private insurance company
• Previous attempts to merge data into the wealth
  survey did the companies not approve

13
LWS and Sweden

• Strategy to get data for occupational pensions
• Supporting Statistic Sweden in starting up a new
  discussion with the insurance companies
• Rough estimates can be made about technical
  reserves for individuals for private and
  occupational pensions using the Swedish
  longitudinal database, LINDA (A tedious work with
  many hours in front of a computer)

14
LWS and Sweden

• Table 5 in SBS paper
• Value of tenant ownerships rights in housing
  co-operatives and technical reserves for savings
  in private and occupational pension schemes are
  included in the national balance sheet
• Deduct these three variables from the national
  balance sheet gives a ratio of some 70 per cent
• Deduct even NPISH gives a ratio of nearly 80 per
  cent