The Assets and Liabilities of Cohorts: The Antecedents of Retirement Security
AbstractThis paper uses repeated cross-sectional data from the Surveys of Consumer Finances (SCF) to characterize cohort patterns of net worth and debt of American households. Cohort patterns provide a useful benchmark for identifying potentially vulnerable households based on relative financial positions over time at similar ages. We also summarize attitudinal measures thought to be related financial capability. Both sets of descriptive data are useful in assessing the well-being of households over the life course and ultimately preparation for retirement. We find a striking rise in debt across cohorts over time, relative to total assets and relative to income, although debt-holding declines with age as is expected. Debt is dominated by mortgages, particularly for more recent cohorts relative to similar aged cohorts 15 year prior. Tabulations of age cohorts by race or education level show predictable similar patterns. An analysis of panel data using the 2007-2009 SCF provides some support for the idea that older households lost more during the recession, as did minorities and people of higher levels of net worth. While primarily descriptive in nature, the stylized facts presented in this paper are suggestive of the trajectory for households moving into retirement age over the next decade. We do not find substantial evidence of more recent generations falling behind, nor major shifts in attitudes towards risk taking or other attitudes that might be reasonably correlated with asset or debt levels.
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 InfoPaper provided by University of Michigan, Michigan Retirement Research Center in its series Working Papers with number wp296.
Length: 58 pages
Date of creation: Oct 2013
Date of revision:
Contact details of provider:
Postal: P.O. Box 1248, Ann Arbor, MI 48104
Phone: (734) 615-0422
Fax: (734) 647-4575
Web page: http://www.mrrc.isr.umich.edu/publications/papers/
More information through EDIRC
This paper has been announced in the following NEP Reports:
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.:
- Courtney Coile & Peter Diamond & Jonathan Gruber & Alain Jousten, 1999.
"Delays in Claiming Social Security Benefits,"
NBER Working Papers
7318, National Bureau of Economic Research, Inc.
- Motohiro Yogo & Jessica Wachter, 2007.
"Why do Household Portfolio Shares Rise in Wealth?,"
2007 Meeting Papers
929, Society for Economic Dynamics.
- Wen-Chi Liao & Daxuan Zhao & Tien Sing, 2014. "Risk Attitude and Housing Wealth Effect," The Journal of Real Estate Finance and Economics, Springer, vol. 48(3), pages 467-491, April.
- Sarah S. Jiang & Lucia F. Dunn, 2013. "New Evidence On Credit Card Borrowing And Repayment Patterns," Economic Inquiry, Western Economic Association International, vol. 51(1), pages 394-407, 01.
- 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.
- Jappelli Tullio & Pagano Marco & Di Maggio Marco, 2013.
"Households' indebtedness and financial fragility,"
Journal of Financial Management, Markets and Institutions,
Società editrice il Mulino, issue 1, pages 26-35, January.
- W. G. Gale & J. K. Scholz, .
"Intergenerational transfers and the accumulation of wealth,"
Institute for Research on Poverty Discussion Papers
1019-93, University of Wisconsin Institute for Research on Poverty.
- William G. Gale & John Karl Scholz, 1994. "Intergenerational Transfers and the Accumulation of Wealth," Journal of Economic Perspectives, American Economic Association, vol. 8(4), pages 145-160, Fall.
- William G. Gale & John Karl Scholz, 1991. "Intergenerational Transfers and the Accumulation of Wealth," UCLA Economics Working Papers 624, UCLA Department of Economics.
- Willaim G. Gale & Karen M. Pence, 2006. "Are Successive Generations Getting Wealthier, and If So, Why?," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 37(1), pages 155-234.
- John Karl Scholz & Ananth Seshadri & Surachai Khitatrakun, 2006.
"Are Americans Saving "Optimally" for Retirement?,"
Journal of Political Economy,
University of Chicago Press, vol. 114(4), pages 607-643, August.
- Blau, Francine D & Graham, John W, 1990.
"Black-White Differences in Wealth and Asset Composition,"
The Quarterly Journal of Economics,
MIT Press, vol. 105(2), pages 321-39, May.
- Francine D. Blau & John W. Graham, 1990. "Black-White Differences in Wealth and Asset Composition," NBER Working Papers 2898, National Bureau of Economic Research, Inc.
- Aldo Barba & Massimo Pivetti, 2009. "Rising household debt: Its causes and macroeconomic implications--a long-period analysis," Cambridge Journal of Economics, Oxford University Press, vol. 33(1), pages 113-137, January.
- Dean Baker & David Rosnick, 2008. "The Impact of the Housing Crash on Family Wealth," CEPR Reports and Issue Briefs 2008-20, Center for Economic and Policy Research (CEPR).
- Edward N. Wolff, 2012. "The Asset Price Meltdown and the Wealth of the Middle Class," NBER Working Papers 18559, National Bureau of Economic Research, Inc.
- Deaton, Angus, 1985. "Panel data from time series of cross-sections," Journal of Econometrics, Elsevier, vol. 30(1-2), pages 109-126.
- Thomas A. Durkin, 2000. "Credit cards: use and consumer attitudes, 1970-2000," Federal Reserve Bulletin, Board of Governors of the Federal Reserve System (U.S.), issue Sep, pages 623-634.
- Emmons, William R. & Noeth, Bryan J., 2013. "Why did young families lose so much wealth during the crisis? the role of homeownership," Review, Federal Reserve Bank of St. Louis, issue Jan, pages 1-26.
- Yoon Lee & Jean Lown & Deanna Sharpe, 2007. "Predictors of Holding Consumer and Mortgage Debt among Older Americans," Journal of Family and Economic Issues, Springer, vol. 28(2), pages 305-320, June.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (MRRC Administrator).
If references are entirely missing, you can add them using this form.