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The impact of Social Security and other factors on the distribution of wealth

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  • Jagadeesh Gokhale
  • Laurence J. Kotlikoff

Abstract

Auerbach et al. (1995), document the dramatic postwar increase in the annuitization of the resources of America’s elderly. Gokhale et al. (1996) suggest that greater annuitization may explain the significant postwar rise in the consumption propensity of the elderly out of remaining lifetime resources. Gokhale et al. (2000) consider the related point that increased annuitization will reduce bequests, especially for lower and middle-income households, whose entire earnings are taxed under Social Security. By differentially disenfranchising the children of the poor from receipt of inheritances, Social Security may materially alter the distribution of wealth. This paper uses data from the PSID to further analyze how Social Security and other factors affect wealth inequality.

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Paper provided by Federal Reserve Bank of Cleveland in its series Working Paper with number 9913.

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Date of creation: 1999
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Handle: RePEc:fip:fedcwp:9913

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Keywords: Social security ; Wealth;

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Cited by:
  1. Jeffrey R. Brown & Courtney C. Coile & Scott J. Weisbenner, 2010. "The Effect of Inheritance Receipt on Retirement," The Review of Economics and Statistics, MIT Press, vol. 92(2), pages 425-434, May.
  2. Tricia Gladden & Christopher Taber, 2009. "The relationship between wage growth and wage levels," Journal of Applied Econometrics, John Wiley & Sons, Ltd., John Wiley & Sons, Ltd., vol. 24(6), pages 914-932.
  3. Turnovsky, Stephen J. & Bruce, Neil, 2007. "Uncertain Retirement and the Effects of Social Insurance on Savings, Wealth, and Welfare," Economics - The Open-Access, Open-Assessment E-Journal, Kiel Institute for the World Economy, vol. 1(2), pages 1-41.

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