The Devolution of the American Pension System: Who Gained and Who Lost?
AbstractOne of the most dramatic transformations in the economy over the last two decades has been the replacement of traditional Defined Benefit (DB) pension plans with Defined Contribution (DC) pensions. Using data from the 1983, 1989, and 1998 Survey of Consumer Finances (SCF), I find that among age group 47-64, the proportion with a DB plan plummeted from 69% to 42% between 1983 and 1998 and the share with a DC plan skyrocketed from 12% to 60%. However, median Private Accumulations (the sum of net worth and pension wealth) fell by 14% among middle-aged households over this period. The inequality of total pension wealth increased sharply over this period as a result of the switchover from DB plans to DC accounts. DB pension wealth is also found to have a very modest equalizing effect on overall wealth inequality. Moreover, DB pension wealth has a weaker offsetting effect on wealth inequality in 1998 than in 1983.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Eastern Economic Association in its journal Eastern Economic Journal.
Volume (Year): 29 (2003)
Issue (Month): 4 (Fall)
Contact details of provider:
Postal: c/o Dr. Alexandre Olbrecht, The Anisfield School of Business 205, Ramapo College, 505 Ramapo Valley Road, Ramapo, New Jersey 07430, USA
Phone: (201) 684-7346
Web page: http://www.ramapo.edu/eea/journal.html
More information through EDIRC
Find related papers by JEL classification:
- D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
- H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Poterba, James M & Venti, Steven F & Wise, David A, 1998. "401(k) Plans and Future Patterns of Retirement Saving," American Economic Review, American Economic Association, vol. 88(2), pages 179-84, May.
- Alan L. Gustman & Olivia S. Mitchell & Andrew A. Samwick & Thomas L. Steinmeier, 1997.
"Pension and Social Security Wealth in the Health and Retirement Study,"
NBER Working Papers
5912, National Bureau of Economic Research, Inc.
- Alan L. Gustman & Olivia S. Mitchell & Andrew A. Samwick & Thomas L. Steinmeier, . "Pension and Social Security Wealth in the Health and Retirement Study," Pension Research Council Working Papers 97-3, Wharton School Pension Research Council, University of Pennsylvania.
- Bloom, David E & Freeman, Richard B, 1992. "The Fall in Private Pension Coverage in the United States," American Economic Review, American Economic Association, vol. 82(2), pages 539-45, May.
- Alan L. Gustman & Thomas L. Steinmeier, 1989. "The Stampede Toward Defined Contribution Pension Plans: Fact or Fiction?," NBER Working Papers 3086, National Bureau of Economic Research, Inc.
- Martha A. Starr, 2006. "Macroeconomic dimensions of social economics: Saving, the stock market, and pension systems," Working Papers 2006-09, American University, Department of Economics.
- Edward Wolff & Ajit Zacharias, 2009.
"Household wealth and the measurement of economic well-being in the United States,"
Journal of Economic Inequality,
Springer, vol. 7(2), pages 83-115, June.
- Edward N. Wolff & Ajit Zacharias, 2006. "Household Wealth and the Measurement of Economic Well-Being in the United States," Economics Working Paper Archive wp_447, Levy Economics Institute.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Victor Matheson, College of the Holy Cross).
If references are entirely missing, you can add them using this form.