Trust in the pension system and housing investment

Purpose This research contributes to the existing literature on the connection between trust and investment activities by exploring the effect of trust in the retirement system on dwelling investments. Design/methodology/approach This study utilizes data including 28 OECD countries from 2009 to 2020, and employs panel fixed effects and GMM estimators. Findings The analysis reveals a negative relationship between trust in the retirement system and investment in dwellings. Notably, this is found to be more evident in countries that promote neo-liberalized welfare systems. Practical implications The implications of our results are particularly relevant for policymakers and international construction firms. Originality/value The primary contribution of this paper extends the “trust–pension investment behavior” nexus. We explore whether individuals with diminished trust in the retirement system consider investing in the property market as an alternative means to safeguard their financial well-being during retirement.