Permanent Income, Age and the Distribution of Wealth
AbstractWithin a life cycle framework, this paper focuses first, on the relation, adjusted for age, between wealth and lifetime resources (comprising permanent (labor) income and inheritance) and second, on distributional issues, through the contribution to wealth inequality of age and permanent income combined. The theoretical analysis concentrates on the other factors of wealth inequality and shows that they are likely to induce non linearities between wealth and resources. Empirical French results reveal the crucial role played by inheritance in accumulation, the lifetime propensity to save out of capital receipts being much higher than the one out of permanent income. Moreover, the joint contribution to wealth inequality of age and permanent income may be quite important, although not dominant (26% in Canada, around 45% in France).
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Bibliographic InfoArticle provided by ENSAE in its journal Annals of Economics and Statistics.
Volume (Year): (1988)
Issue (Month): 9 ()
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- Glenn R. Hubbard & Jonathan Skinner & Stephen P. Zeldes, .
"Precautionary Saving and Social Insurance,"
Rodney L. White Center for Financial Research Working Papers
3-95, Wharton School Rodney L. White Center for Financial Research.
- Glenn R. Hubbard & Jonathan Skinner & Stephen P. Zeldes, . "Precautionary Saving and Social Insurance," Rodney L. White Center for Financial Research Working Papers 03-95, Wharton School Rodney L. White Center for Financial Research.
- R. Glenn Hubbard & Jonathan Skinner & Stephen P. Zeldes, 1994. "Precautionary Saving and Social Insurance," NBER Working Papers 4884, National Bureau of Economic Research, Inc.
- Leung, Siu Fai, 2001. "The life-cycle model of saving with uncertain lifetime and borrowing constraint;: characterization and sensitivity analysis," Mathematical Social Sciences, Elsevier, vol. 42(2), pages 179-201, September.
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