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Retirement plan wealth inequality: measurement and trends

Author

Listed:
  • Ghilarducci, Teresa
  • Radpour, Siavash
  • Webb, Anthony

Abstract

Using Health and Retirement Study data linked to summary plan descriptions and W-2s, this study reports trends in retirement wealth inequality of older employees 1992–2010. The study identifies and corrects methodological flaws in past research. Retirement wealth is highly unequally distributed; the top lifetime earnings quintile holds half of all retirement wealth, the bottom quintile, only 1%. The top earnings quintile fared better in 2010 than in 1992, whereas bottom-quintile earners fared worse. But retirement wealth inequality mainly reflects inequality within earnings quintiles, resulting from inadequate savings, not outsize accumulations. Systemic flaws reduce median retirement wealth by 84%

Suggested Citation

  • Ghilarducci, Teresa & Radpour, Siavash & Webb, Anthony, 2022. "Retirement plan wealth inequality: measurement and trends," Journal of Pension Economics and Finance, Cambridge University Press, vol. 21(1), pages 119-139, January.
    • Handle: RePEc:cup:jpenef:v:21:y:2022:i:1:p:119-139_7
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    JEL classification:

    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
    • J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions
    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

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