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A Cohort Analysis of Wealth-Age Profiles: Lessons from Psid

Author

Listed:
  • Joonwoo Nahm

    (Sogang University)

  • Robert F. Schoeni

    (Institute for Social Research, University of Michigan)

Abstract

Given the importance of the shape of the wealth-age profile according to the life cycle model, and the fact that the theory does not imply a specific functional form, we argue that a non-parametric estimation strategy is ideal. Nonparametric profiles and semiparametric partial linear models indicate that typical parametric representations can be misleading. Moreover, we find that there are strong and clear patterns of wealth accumulation through the mid-50s, flat wealth holdings during the late 50s and mid-60s, followed by decumulation during the rest of the life cycle, which is consistent with predictions of the life cycle model.

Suggested Citation

  • Joonwoo Nahm & Robert F. Schoeni, 2010. "A Cohort Analysis of Wealth-Age Profiles: Lessons from Psid," Korean Economic Review, Korean Economic Association, vol. 26, pages 59-78.
    • Handle: RePEc:kea:keappr:ker-20100630-26-1-03
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    References listed on IDEAS

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    More about this item

    Keywords

    cohort analysis; partial linear model; wealth accumulation;
    All these keywords.

    JEL classification:

    • C1 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General
    • J1 - Labor and Demographic Economics - - Demographic Economics

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