Sweden in the LWS
Lennart Berg and Henry Ohlsson Uppsala University 8 December 2006
Prepared for the LWS Conference
14-15 December 2006
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LWS-SE
Sweden is:
• poorer than the other LWS countries
• more unequal than, e g, the US
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Dec. 2006
2
Top wealth shares in Sweden top 1% (P99-100) and next 9% (P90-99), 1800-2003
70 60 50 40 30 20 10 0 1800
Share of total wealth (%)
1840 P99-100 (wealth tax based) P90-99 (SCB, 1975-2000) P99-100 (Spånt, 1920-75)
1880
1920
1960
2000
P90-99 (wealth tax based) P99-100 (estate based) P90-99 (Spånt, 1920-1975)
P99-100 (SCB, 1975-2000) P90-99 (estate based)
Source: Ohlsson, Roine & Waldenström (2006), Figure 7.
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Wealth concentration in Sweden 2002, percent
data set
nobs
unit
weights
top 10
top 1
next 9
top 1/top 10
LWS-SE
17 954
hh
no yes
60.1 58.2 59.0 57.3 51.4 51.4
24.3 17.5 18.0 18.4 16.0 17.0
35.8 40.7 41.0 38.9 35.0 34.4
40.5 30.1 30.5 32.1 31.1 33.1
HEK LINDA total estate reports
17 954
hh
yes
303 652
hh
no
7 mil
ind
no
95 238
ind
no
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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
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Underreported balance sheet items
• Deposit accounts (DA)
• Foreign assets • Self-employed’s working capital BELINDA
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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
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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
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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
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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
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LWS and Sweden
Household wealth 2002, current prices based on Statistics Sweden's wealth survey Billions SEK Net wealth Aggregate numbers 3000 Extended net wealth Per cent of extended net wealth to net wealth of the survey 116 134 136
Technical reserves of Private pension savings (PA1) Occupational pension savings (PA3) SSW: DC (premium pension) SSW: NDC (income pension) GDP 2002 = 2371 billions
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469 561 59 5729
3469 4030 4089
11
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 Sweden’s yearly crosssection 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
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LWS and Sweden
Strategy to get data for occupational pensions:
1. Supporting Statistic Sweden in starting up a new discussion with the insurance companies 2. 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)
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LWS and Sweden
Table 5 in SBS paper:
LWS data 0.35 ???? National balance sheet
Value of tenant ownerships rights in housing cooperatives 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
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nearly 80 per cent
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