The Fornero Reform and Its Effects on Household Financial Behavior and Retirement Planning

How does an exogenous and unanticipated increase in the retirement age generate forward-looking effects on household saving behavior? This thesis addresses this question by exploiting the 2011 Italian pension reform (the Fornero reform) as a quasi-natural experiment. Using micro-level data from the Bank of Italy’s Survey on Household Income and Wealth (SHIW), the analysis constructs a treatment variable that captures the increase in retirement age and estimates its effects on financial outcomes through a difference-in-differences (DiD) strategy with an event-study extension. The results show no significant response in household consumption, suggesting that families smooth consumption despite retirement-related shocks. Moreover, savings decrease when the retirement age increases for the main earner, consistent with a reduced need for precautionary accumulation. In contrast, household savings rise when the secondary earner faces a delay, suggesting a compensatory adjustment to coordinate retirement timing. Gender-specific patterns emerge: women are more likely to invest in complementary pensions and, to a lesser extent, in death insurance. Additionally, main earners display a higher propensity to purchase both life and death insurance, pointing to differentiated financial protection strategies within the household.