When workers save less during their working lives due to the fact that they have been contributing to their public pension, this is known as
A)the bequest effect.
B)the life cycle model.
C)the wealth substitution effect.
D)the public pension wealth effect.

Question

Quizplus · Accepted Answer

The wealth substitution effect occurs when individuals save less privately because they expect to receive public pension benefits in retirement, thus substituting public pension wealth for private savings.

When Workers Save Less During Their Working Lives Due to the Fact