IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Log in (now much improved!) to save this book chapter

The Impact of Social Security and Other Factors on the Distribution of Wealth

In: The Distributional Aspects of Social Security and Social Security Reform

Listed author(s):
  • Jagadeesh Gokhale
  • Laurence J. Kotlikoff

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. The Gini coefficient of the simulated equilibrium wealth distribution is 21 percent larger and the share of wealth held by the wealthiest 1 percent of households is 79 percent higher in the presence of Social Security.

(This abstract was borrowed from another version of this item.)

If 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.

File URL: http://www.nber.org/chapters/c9749.pdf
Download Restriction: no

as
in new window

This chapter was published in:
  • Martin Feldstein & Jeffrey B. Liebman, 2002. "The Distributional Aspects of Social Security and Social Security Reform," NBER Books, National Bureau of Economic Research, Inc, number feld02-1, November.
  • This item is provided by National Bureau of Economic Research, Inc in its series NBER Chapters with number 9749.
    Handle: RePEc:nbr:nberch:9749
    Contact details of provider: Postal:
    National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.

    Phone: 617-868-3900
    Web page: http://www.nber.org
    Email:


    More information through EDIRC

    References listed on IDEAS
    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.:

    as
    in new window


    1. Ionnides, Yannis M & Sato, Ryuzo, 1987. "On the Distribution of Wealth and Intergenerational Transfers," Journal of Labor Economics, University of Chicago Press, vol. 5(3), pages 366-385, July.
    2. William M. Gentry & R. Glenn Hubbard, 1997. "Distributional Implications of Introducing a Broad-Based Consumption Tax," NBER Chapters,in: Tax Policy and the Economy, Volume 11, pages 1-48 National Bureau of Economic Research, Inc.
    3. Dearden, Lorraine & Machin, Stephen & Reed, Howard, 1997. "Intergenerational Mobility in Britain," Economic Journal, Royal Economic Society, vol. 107(440), pages 47-66, January.
    4. Hubbard, R Glenn & Skinner, Jonathan & Zeldes, Stephen P, 1995. "Precautionary Saving and Social Insurance," Journal of Political Economy, University of Chicago Press, vol. 103(2), pages 360-399, April.
    5. John Laitner, 1979. "Household Bequest Behaviour and the National Distribution of Wealth," Review of Economic Studies, Oxford University Press, vol. 46(3), pages 467-483.
    6. Jagadeesh Gokhale & Laurence J. Kotlikoff & John Sabelhaus, 1995. "Understanding the postwar decline in United States saving: a cohort analysis," Working Paper 9518, Federal Reserve Bank of Cleveland.
    7. Zimmerman, David J, 1992. "Regression toward Mediocrity in Economic Stature," American Economic Review, American Economic Association, vol. 82(3), pages 409-429, June.
    8. Kotlikoff, Laurence J & Summers, Lawrence H, 1981. "The Role of Intergenerational Transfers in Aggregate Capital Accumulation," Journal of Political Economy, University of Chicago Press, vol. 89(4), pages 706-732, August.
    9. Altonji, Joseph G & Hayashi, Fumio & Kotlikoff, Laurence J, 1992. "Is the Extended Family Altruistically Linked? Direct Tests Using Micro Data," American Economic Review, American Economic Association, vol. 82(5), pages 1177-1198, December.
    10. Hayashi, Fumio & Altonji, Joseph & Kotlikoff, Laurence, 1996. "Risk-Sharing between and within Families," Econometrica, Econometric Society, vol. 64(2), pages 261-294, March.
    11. Hall, Robert E, 1988. "Intertemporal Substitution in Consumption," Journal of Political Economy, University of Chicago Press, vol. 96(2), pages 339-357, April.
    12. Vincenzo Quadrini, 2000. "Entrepreneurship, Saving and Social Mobility," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 3(1), pages 1-40, January.
    13. David Miles, 1997. "Demographics and savings: can we reconcile the evidence?," IFS Working Papers W97/06, Institute for Fiscal Studies.
    14. Boskin, Michael J. & Kotlikoff, Laurence J., 1985. "Public debt and United States saving: A new test of the neutrality hypothesis," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 23(1), pages 55-86, January.
    15. Blinder, Alan S, 1976. "Inequality and Mobility in the Distribution of Wealth," Kyklos, Wiley Blackwell, vol. 29(4), pages 607-638.
    16. Stiglitz, Joseph E, 1969. "Distribution of Income and Wealth among Individuals," Econometrica, Econometric Society, vol. 37(3), pages 382-397, July.
    17. Steven Caldwell & Melissa Favreault & Alla Gantman & Jagadeesh Gokhale & Thomas Johnson & Laurence J. Kotlikoff, 1999. "Social Security's Treatment of Postwar Americans," NBER Chapters,in: Tax Policy and the Economy, Volume 13, pages 109-148 National Bureau of Economic Research, Inc.
    18. Alan J. Auerbach & Jagadeesh Gokhale & Laurence J. Kotlikoff & John Sabelhaus & David N. Weil, 1994. "The annuitization of Americans' resources: a cohort analysis," Working Paper 9413, Federal Reserve Bank of Cleveland.
    19. Altonji, Joseph G & Hayashi, Fumio & Kotlikoff, Laurence J, 1997. "Parental Altruism and Inter Vivos Transfers: Theory and Evidence," Journal of Political Economy, University of Chicago Press, vol. 105(6), pages 1121-1166, December.
    20. Gokhale, Jagadeesh & Kotlikoff, Laurence J. & Sefton, James & Weale, Martin, 2001. "Simulating the transmission of wealth inequality via bequests," Journal of Public Economics, Elsevier, vol. 79(1), pages 93-128, January.
    21. Bernheim, B Douglas & Shleifer, Andrei & Summers, Lawrence H, 1986. "The Strategic Bequest Motive," Journal of Labor Economics, University of Chicago Press, vol. 4(3), pages 151-182, July.
    22. Alan S. Blinder, 1973. "A Model of Inherited Wealth," The Quarterly Journal of Economics, Oxford University Press, vol. 87(4), pages 608-626.
    23. Laitner, John & Juster, F Thomas, 1996. "New Evidence on Altruism: A Study of TIAA-CREF Retirees," American Economic Review, American Economic Association, vol. 86(4), pages 893-908, September.
    24. Davies, J B & Shorrocks, Anthony F, 1978. "Assessing the Quantitative Importance of Inheritance in the Distribution of Wealth," Oxford Economic Papers, Oxford University Press, vol. 30(1), pages 138-149, March.
    25. James B. Davies, 1982. "The Relative Impact of Inheritance and Other Factors on Economic Inequality," The Quarterly Journal of Economics, Oxford University Press, vol. 97(3), pages 471-498.
    26. Michael D. Hurd, 1986. "Savings and Bequests," NBER Working Papers 1826, National Bureau of Economic Research, Inc.
    27. Gary S. Becker & Nigel Tomes, 1994. "Human Capital and the Rise and Fall of Families," NBER Chapters,in: Human Capital: A Theoretical and Empirical Analysis with Special Reference to Education (3rd Edition), pages 257-298 National Bureau of Economic Research, Inc.
    28. Hubbard, R Glenn & Judd, Kenneth L, 1987. "Social Security and Individual Welfare: Precautionary Saving, Borrowing Constraints, and the Payroll Tax," American Economic Review, American Economic Association, vol. 77(4), pages 630-646, September.
    29. Huggett, Mark, 1996. "Wealth distribution in life-cycle economies," Journal of Monetary Economics, Elsevier, vol. 38(3), pages 469-494, December.
    30. Oulton, Nicholas, 1976. "Inheritance and the Distribution of Wealth," Oxford Economic Papers, Oxford University Press, vol. 28(1), pages 86-101, March.
    31. Wilhelm, Mark O, 1996. "Bequest Behavior and the Effect of Heirs' Earnings: Testing the Altruistic Model of Bequests," American Economic Review, American Economic Association, vol. 86(4), pages 874-892, September.
    32. Pryor, Frederic L, 1973. "Simulation of the Impact of Social and Economic Institutions on the Size Distribution of Income and Wealth," American Economic Review, American Economic Association, vol. 63(1), pages 50-72, March.
    33. Wilhelm, Mark O, 1997. "Inheritance, Steady-State Consumption Inequality, and the Lifetime Earnings Process," The Manchester School of Economic & Social Studies, University of Manchester, vol. 65(4), pages 466-476, September.
    34. Weale, Martin, 1992. "The Benefits of Higher Education: A Comparison of Universities and Polytechnics," Oxford Review of Economic Policy, Oxford University Press, vol. 8(2), pages 35-47, Summer.
    35. James B. Davies & Peter J. Kuhn, 1991. "A Dynamic Model of Redistribution, Inheritance, and Inequality," Canadian Journal of Economics, Canadian Economics Association, vol. 24(2), pages 324-344, May.
    36. Solon, Gary, 1992. "Intergenerational Income Mobility in the United States," American Economic Review, American Economic Association, vol. 82(3), pages 393-408, June.
    37. Atkinson, A B, 1971. "The Distribution of Wealth and the Individual Life-cycle," Oxford Economic Papers, Oxford University Press, vol. 23(2), pages 239-254, July.
    38. Tomes, Nigel, 1981. "The Family, Inheritance, and the Intergenerational Transmission of Inequality," Journal of Political Economy, University of Chicago Press, vol. 89(5), pages 928-958, October.
    39. Feldstein, Martin S, 1974. "Social Security, Induced Retirement, and Aggregate Capital Accumulation," Journal of Political Economy, University of Chicago Press, vol. 82(5), pages 905-926, Sept./Oct.
    40. Flemming, J S, 1979. "The Effects of Earnings Inequality, Imperfect Capital Markets, and Dynastic Altruism on the Distribution of Wealth in Life Cycle Models," Economica, London School of Economics and Political Science, vol. 46(184), pages 363-380, November.
    41. Abel, Andrew B, 1985. "Precautionary Saving and Accidental Bequests," American Economic Review, American Economic Association, vol. 75(4), pages 777-791, September.
    42. Loury, Glenn C, 1981. "Intergenerational Transfers and the Distribution of Earnings," Econometrica, Econometric Society, vol. 49(4), pages 843-867, June.
    43. Hurd, Michael D, 1990. "Research on the Elderly: Economic Status, Retirement, and Consumption and Saving," Journal of Economic Literature, American Economic Association, vol. 28(2), pages 565-637, June.
    44. Becker, Gary S & Tomes, Nigel, 1979. "An Equilibrium Theory of the Distribution of Income and Intergenerational Mobility," Journal of Political Economy, University of Chicago Press, vol. 87(6), pages 1153-1189, December.
    45. Laitner, John, 1979. "Household Bequests, Perfect Expectations, and the National Distribution of Wealth," Econometrica, Econometric Society, vol. 47(5), pages 1175-1193, September.
    46. J. E. Meade, 1966. "Life-Cycle Savings, Inheritance and Economic Growth," Review of Economic Studies, Oxford University Press, vol. 33(1), pages 61-78.
    Full references (including those not matched with items on IDEAS)

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    When requesting a correction, please mention this item's handle: RePEc:nbr:nberch:9749. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.