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Wealth Holdings and Portfolio Allocation of the Elderly: The Role of Marital History

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Abstract

This paper investigates the role of marital history in terms of explaining differences in wealth holdings and portfolio allocation of older individuals by studying data drawn from the Health and Retirement Study. Consistent with the previous literature, the results generally suggest that both men and women suffer from the negative shocks of past marital dissolutions in terms of household wealth accumulation. The significance level, however, differs across married couples, single males, and single females. Among currently married couples, the wealth gap between the stably married households and those who have some marital disruption experience is small enough in terms of overall wealth levels. This possibly suggests that, for those who remarry after divorce, there is recovery from the sufferings of marital disruptions, which have occurred earlier in the life cycle. While marital history variables turn out to be minor factors in explaining the dispersion in wealth holdings of currently single males, they play a major role in understanding that of single females. This is clearly consistent with previous work which concluded that after divorce both men and women suffer a decrease in well-being, but women’s decline is far more serious than men’s. The examination of the asset components of net worth also indicates that both the probability of owning a particular asset and the fraction of wealth allocated to that asset might vary depending on the elderly individuals’ marital history. The results are mixed in terms of gender and current marital status, which remind us the role of remarriage and gender specific responses to household dissolutions.

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File URL: http://www.deakin.edu.au/buslaw/aef/workingpapers/papers/2008_16eco.pdf
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Bibliographic Info

Paper provided by Deakin University, Faculty of Business and Law, School of Accounting, Economics and Finance in its series Economics Series with number 2008_16.

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Length: 37 pages
Date of creation: 26 Oct 2008
Date of revision:
Handle: RePEc:dkn:econwp:eco_2008_16

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Keywords: Wealth; Portfolio Allocation; Elderly; Marital History;

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Cited by:
  1. Hung-Hao Chang & Rodolfo Nayga & Kung-Chi Chan, 2011. "Gendered Analyses of Nutrient Deficiencies Among the Elderly," Journal of Family and Economic Issues, Springer, vol. 32(2), pages 268-279, June.
  2. Eun Kim & Sherman Hanna & Swarn Chatterjee & Suzanne Lindamood, 2012. "Who Among the Elderly Owns Stocks? The Role of Cognitive Ability and Bequest Motive," Journal of Family and Economic Issues, Springer, vol. 33(3), pages 338-352, September.
  3. Xuewen Sheng & Timothy Killian, 2009. "Over Time Dynamics of Monetary Intergenerational Exchanges," Journal of Family and Economic Issues, Springer, vol. 30(3), pages 268-281, September.
  4. Sharifah Haron & Deanna Sharpe & Jariah Masud & Mohamed Abdel-Ghany, 2010. "Health Divide: Economic and Demographic Factors Associated with Self-Reported Health Among Older Malaysians," Journal of Family and Economic Issues, Springer, vol. 31(3), pages 328-337, September.
  5. Vanessa Hunn & Claudia Heath, 2011. "Path Analysis of Welfare Use: Depression as a Mediating Factor," Journal of Family and Economic Issues, Springer, vol. 32(2), pages 341-355, June.
  6. Tansel Yilmazer & Angela Lyons, 2010. "Marriage and the Allocation of Assets in Women’s Defined Contribution Plans," Journal of Family and Economic Issues, Springer, vol. 31(2), pages 121-137, June.
  7. Christopher Tamborini & Howard Iams & Gayle Reznik, 2012. "Women’s Earnings Before and After Marital Dissolution: Evidence from Longitudinal Earnings Records Matched to Survey Data," Journal of Family and Economic Issues, Springer, vol. 33(1), pages 69-82, March.
  8. Anoshua Chaudhuri, 2009. "Spillover Impacts of a Reproductive Health Program on Elderly Women in Rural Bangladesh," Journal of Family and Economic Issues, Springer, vol. 30(2), pages 113-125, June.
  9. Elena Gouskova & Ngina Chiteji & Frank Stafford, 2010. "Pension Participation: Do Parents Transmit Time Preference?," Journal of Family and Economic Issues, Springer, vol. 31(2), pages 138-150, June.
  10. Patti Fisher & Catherine Montalto, 2011. "Loss Aversion and Saving Behavior: Evidence from the 2007 U.S. Survey of Consumer Finances," Journal of Family and Economic Issues, Springer, vol. 32(1), pages 4-14, March.
  11. Antwan Jones, 2010. "Stability of Men’s Interracial First Unions: A Test of Educational Differentials and Cohabitation History," Journal of Family and Economic Issues, Springer, vol. 31(2), pages 241-256, June.
  12. Haejeong Kim & Jinhee Kim, 2010. "Information Search for Retirement Plans Among Financially Distressed Consumers," Journal of Family and Economic Issues, Springer, vol. 31(1), pages 51-62, March.
  13. Patti Fisher, 2013. "Is There Evidence of Loss Aversion in Saving Behaviors in Spain?," Journal of Family and Economic Issues, Springer, vol. 34(1), pages 41-51, March.
  14. Matthew Painter & Jonathan Vespa, 2012. "The Role of Cohabitation in Asset and Debt Accumulation During Marriage," Journal of Family and Economic Issues, Springer, vol. 33(4), pages 491-506, December.
  15. Rui Yao & Deanna Sharpe & Elizabeth Gorham, 2011. "An Exploratory Study of Chinese Americans’ Debt Ownership," Journal of Family and Economic Issues, Springer, vol. 32(4), pages 600-611, December.

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