This paper examines the extent to which households offset pension weal
th with reductions in other wealth. Systematic econometric biases impl
y that the estimated offsets in previous empirical studies are smaller
than the true offset and may even have the wrong sign. New empirical
estimates that do not correct for the biases generate little offset be
tween pensions and other wealth. Estimates that correct for the biases
show substantially more offset (a smaller impact of pensions on overa
ll saving) than in most previous studies. The estimates also indicate
that the effects of pensions on wealth vary significantly across house
holds.