IDEAS home Printed from https://ideas.repec.org/p/crr/crrwps/wp2007-03.html
   My bibliography  Save this paper

Cross-National Comparison of Income and Wealth Status in Retirement: First Results From the Luxembourg Wealth Study (LWS)

Author

Listed:
  • Eva Sierminska
  • Andrea Brandolini

    (Bank of Italy)

  • Timothy M. Smeeding

    (Center for Policy Research, Syracuse University)

Abstract

This paper provides a first glance at the role of income and wealth in comparing economic security of older persons in the United States in cross-national perspective. We compare our elders to those in six other rich OECD countries (Canada, Finland, Germany, Italy, Sweden, and the United Kingdom). These countries have diverse social policy systems, with respect to both social insurance and public assistance; and they have very different patterns of private wealth holding. The paper is based on a new source of wealth micro data, known as the Luxembourg Wealth Study (LWS). In this paper, we first develop a comparable definition of wealth and net worth across nations and then focus our efforts on the inter-country variation in the composition of income and asset packages for those 65 and over, with respect to the main sources in each package. We examine the structure of income and wealth holdings and their joint distribution; income and asset poverty of the elderly; the importance of home ownership in providing security for the elderly; differences in wealth by education; and we provide an initial glimpse at wealth and income inequality in a comparative perspective. We conclude by comparing the risks associated with private assets to those associated with under-funded public pension systems.

Suggested Citation

  • Eva Sierminska & Andrea Brandolini & Timothy M. Smeeding, 2007. "Cross-National Comparison of Income and Wealth Status in Retirement: First Results From the Luxembourg Wealth Study (LWS)," Working Papers, Center for Retirement Research at Boston College wp2007-03, Center for Retirement Research, revised Feb 2007.
    • Handle: RePEc:crr:crrwps:wp2007-03
    as

    Download full text from publisher

    File URL: http://crr.bc.edu/working-papers/cross-national-comparison-of-income-and-wealth-status-in-retirement-first-results-from-the-luxembourg-wealth-study-lws/
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Maria Chiuri & Tullio Jappelli, 2010. "Do the elderly reduce housing equity? An international comparison," Journal of Population Economics, Springer;European Society for Population Economics, vol. 23(2), pages 643-663, March.
    2. Nuno Martins & Ernesto Villanueva, 2006. "Does limited access to mortgage debt explain why young adults live with their parents?," Working Papers 0628, Banco de España.
    3. Case Karl E. & Quigley John M. & Shiller Robert J., 2005. "Comparing Wealth Effects: The Stock Market versus the Housing Market," The B.E. Journal of Macroeconomics, De Gruyter, vol. 5(1), pages 1-34, May.
    4. Thomas F. Crossley & Yuri Ostrovsky, 2003. "A Synthetic Cohort Analysis of Canadian Housing Careers," Social and Economic Dimensions of an Aging Population Research Papers 107, McMaster University.
    5. Gary Burtless, 2004. "The Age Profile of Income and the Burden of Unfunded Transfers in Four Countries: Evidence from the Luxembourg Income Study," LIS Working papers 394, LIS Cross-National Data Center in Luxembourg.
    6. Jonathan D. Fisher & David S. Johnson & Joseph T. Marchand & Timothy M. Smeeding & Barbara Boyle Torrey, 2007. "No Place Like Home: Older Adults and Their Housing," The Journals of Gerontology: Series B, The Gerontological Society of America, vol. 62(2), pages 120-128.
    7. Eva Sierminska & Thesia Garner, 2002. "A Comparison of Income, Expenditures, and Home Market Value Distributions using Luxembourg Income Study Data from the 1990s," LIS Working papers 338, LIS Cross-National Data Center in Luxembourg.
    8. Irwin Garfinkel & Lee Rainwater & Timothy M. Smeeding, 2006. "A re-examination of welfare states and inequality in rich nations: How in-kind transfers and indirect taxes change the story," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 25(4), pages 897-919.
    9. Eva Sierminska & Yelena Takhtamanova, 2006. "Wealth Effects Out of Financial and Housing Wealth: Cross Country and Age Group Comparisons," LWS Working papers 4, LIS Cross-National Data Center in Luxembourg.
    10. Nikola Dvornak & Marion Kohler, 2007. "Housing Wealth, Stock Market Wealth and Consumption: A Panel Analysis for Australia," The Economic Record, The Economic Society of Australia, vol. 83(261), pages 117-130, June.
    11. François Ortalo-Magné & Sven Rady, 2006. "Housing Market Dynamics: On the Contribution of Income Shocks and Credit Constraints ," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 73(2), pages 459-485.
    12. Steven F. Venti & David A. Wise, 2004. "Aging and Housing Equity: Another Look," NBER Chapters, in: Perspectives on the Economics of Aging, pages 127-180, National Bureau of Economic Research, Inc.
    13. Asena Caner & Edward N. Wolff, 2004. "Asset Poverty In The United States, 1984–99: Evidence From The Panel Study Of Income Dynamics," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 50(4), pages 493-518, December.
    14. Hurst, Erik & Stafford, Frank, 2004. "Home Is Where the Equity Is: Mortgage Refinancing and Household Consumption," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 36(6), pages 985-1014, December.
    15. Gary V. Engelhardt & Jonathan Gruber & Cynthia D. Perry, 2005. "Social Security and Elderly Living Arrangements: Evidence from the Social Security Notch," Journal of Human Resources, University of Wisconsin Press, vol. 40(2).
    16. Atkinson, Tony & Cantillon, Bea & Marlier, Eric & Nolan, Brian, 2002. "Social Indicators: The EU and Social Inclusion," OUP Catalogue, Oxford University Press, number 9780199253494, Decembrie.
    17. Michael D. Hurd & Susann Rohwedder, 2006. "Some Answers to The Retirement-Consumption Puzzle," Working Papers WR-342, RAND Corporation.
    18. Ermisch, John F. & Jenkins, Stephen P., 1999. "Retirement and housing adjustment in later life: evidence from the British Household Panel Survey," Labour Economics, Elsevier, vol. 6(2), pages 311-333, June.
    19. Robert L. Brown & Steven G. Prus, 2006. "Income Inequality over the Later-Life Course: A Comparative Analysis of Seven OECD Countries," Social and Economic Dimensions of an Aging Population Research Papers 154, McMaster University.
    20. Robert Haveman & Edward Wolff, 2005. "The concept and measurement of asset poverty: Levels, trends and composition for the U.S., 1983–2001," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 2(2), pages 145-169, January.
    21. Timothy Smeeding & Eva Sierminska & Andrea Brandolini, 2006. "Comparing Wealth Distribution across Rich Countries: First Results from the Luxembourg Wealth Study," LWS Working papers 1, LIS Cross-National Data Center in Luxembourg.
    22. repec:max:cprpbr:16 is not listed on IDEAS
    23. Steven F. Venti & David A. Wise, 2001. "Choice, Chance, and Wealth Dispersion at Retirement," NBER Chapters, in: Aging Issues in the United States and Japan, pages 25-64, National Bureau of Economic Research, Inc.
    24. James Banks & Richard Blundell & James P. Smith, 2003. "Understanding Differences in Household Financial Wealth between the United States and Great Britain," Journal of Human Resources, University of Wisconsin Press, vol. 38(2).
    25. Michael D. Hurd & Susann Rohwedder, 2006. "Some Answers to the Retirement-Consumption Puzzle," NBER Working Papers 12057, National Bureau of Economic Research, Inc.
    26. Tony Atkinson & Bea Cantillon & Eric Marlier & Brian Nolan, 2002. "Indicators for Social Inclusion," Politica economica, Società editrice il Mulino, issue 1, pages 7-28.
    27. Pietro Catte & Nathalie Girouard & Robert Price & Christophe André, 2004. "Housing Markets, Wealth and the Business Cycle," OECD Economics Department Working Papers 394, OECD Publishing.
    28. Tatsiramos, Konstantinos, 2006. "Residential Mobility and Housing Adjustment of Older Households in Europe," IZA Discussion Papers 2435, Institute of Labor Economics (IZA).
    29. Jurg Siegenthaler, 1996. "Poverty Among Single Elderly Women Under Different Systems of Old-Age Security: A Comparative Review," LIS Working papers 149, LIS Cross-National Data Center in Luxembourg.
    30. Arie Kapteyn & Constantijn Panis, 2003. "The Size and Composition of Wealth Holdings in the United States, Italy, and the Netherlands," NBER Working Papers 10182, National Bureau of Economic Research, Inc.
    31. Juster, F. Thomas & Smith, James P. & Stafford, Frank, 1999. "The measurement and structure of household wealth," Labour Economics, Elsevier, vol. 6(2), pages 253-275, June.
    32. Richard V. Burkhauser & Philip Giles & Dean R. Lillard & Johannes Schwarze, 2005. "Until Death Do Us Part: An Analysis of the Economic Well-Being of Widows in Four Countries," The Journals of Gerontology: Series B, The Gerontological Society of America, vol. 60(5), pages 238-246.
    33. Arie Kapteyn & Constantijn Panis, 2003. "The Size and Composition of Wealth Holdings in the United States, Italy, and the Netherlands," NBER Working Papers 10182, National Bureau of Economic Research, Inc.
    34. Ortalo-Magné, François & Rady, Sven, 2005. "Housing Market Dynamics: On the Contribution of Income Shocks and Credit Constraints (Revised Version)," Discussion Papers in Economics 494, University of Munich, Department of Economics.
    35. Timothy Smeeding, 2006. "Poor People in Rich Nations: The United States in Comparative Perspective," Journal of Economic Perspectives, American Economic Association, vol. 20(1), pages 69-90, Winter.
    36. Eva Sierminska & Andrea Brandolini & Timothy Smeeding, 2006. "The Luxembourg Wealth Study – A cross-country comparable database for household wealth research," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 4(3), pages 375-383, December.
    37. John B. Shoven & Sita N. Slavov, 2006. "Political Risk Versus Market Risk in Social Security," NBER Working Papers 12135, National Bureau of Economic Research, Inc.
    38. Susanna Sandström & Timothy Smeeding, 2005. "Poverty and Income Maintenance in Old Age: A Cross-National View of Low Income Older Women," LIS Working papers 398, LIS Cross-National Data Center in Luxembourg.
    39. Annika Sunde´n, 2006. "The Swedish Experience with Pension Reform," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 22(1), pages 133-148, Spring.
    40. Joseph F. Quinn, 1987. "The Economic Status Of The Elderly: Beware Of The Mean," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 33(1), pages 63-82, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Bruce Bradbury, 2008. "Housing wealth as retirement saving: Does the Australian Model Lead to Over-Consumption of Housing?," LWS Working papers 7, LIS Cross-National Data Center in Luxembourg.
    2. Isabel Z. Martínez, 2021. "Evidence from Unique Swiss Tax Data on the Composition and Joint Distribution of Income and Wealth," NBER Chapters, in: Measuring Distribution and Mobility of Income and Wealth, pages 105-142, National Bureau of Economic Research, Inc.
    3. Dekkers, Gijs, 2008. "Are the old poor? A discussion and some cursory evidence," MPRA Paper 29436, University Library of Munich, Germany.
    4. Figari, Francesco & Matsaganis, Manos & Sutherland, Holly, 2011. "The financial well-being of older people in Europe and the redistributive effects of minimum pension schemes," EUROMOD Working Papers EM7/11, EUROMOD at the Institute for Social and Economic Research.
    5. Netta Achdut & Lea Achdut, 2022. "Joint Income-Wealth Poverty in a Cross-National Perspective: The Role of Country-Level Indicators," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 164(1), pages 499-541, November.
    6. Greet De Vil & Gijs Dekkers & Raphael Desmet, 2010. "Working Paper 10-10 - The long-term adequacy of the Belgian public pension system: An analysis based on the MIDAS model," Working Papers 1010, Federal Planning Bureau, Belgium.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Maria Chiuri & Tullio Jappelli, 2010. "Do the elderly reduce housing equity? An international comparison," Journal of Population Economics, Springer;European Society for Population Economics, vol. 23(2), pages 643-663, March.
    2. Andrea Brandolini & Eva Sierminska & Janet Gornick & Teresa Munzi & Timothy Smeeding, 2006. "Older Women’s Income and Wealth Packages: The Five-Legged Stool in Cross-National Perspective," LWS Working papers 3, LIS Cross-National Data Center in Luxembourg.
    3. Eva Sierminska & Yelena Takhtamanova, 2006. "Wealth Effects Out of Financial and Housing Wealth: Cross Country and Age Group Comparisons," LWS Working papers 4, LIS Cross-National Data Center in Luxembourg.
    4. Marchand, J. & Smeeding, T., 2016. "Poverty and Aging," Handbook of the Economics of Population Aging, in: Piggott, John & Woodland, Alan (ed.), Handbook of the Economics of Population Aging, edition 1, volume 1, chapter 0, pages 905-950, Elsevier.
      • Marchand, Joseph & Smeeding, Timothy, 2016. "Poverty and Aging," Working Papers 2016-11, University of Alberta, Department of Economics, revised 20 Nov 2016.
    5. Frederic S. Mishkin, 2007. "Housing and the monetary transmission mechanism," Proceedings - Economic Policy Symposium - Jackson Hole, Federal Reserve Bank of Kansas City, pages 359-413.
    6. Bonnet, Carole & Gobillon, Laurent & Laferrère, Anne, 2010. "The effect of widowhood on housing and location choices," Journal of Housing Economics, Elsevier, vol. 19(2), pages 94-108, June.
    7. Duca, John V. & Muellbauer, John & Murphy, Anthony, 2010. "Housing markets and the financial crisis of 2007-2009: Lessons for the future," Journal of Financial Stability, Elsevier, vol. 6(4), pages 203-217, December.
    8. Simone Salotti, 2012. "Wealth Effects in the US: Evidence from the Combination of Two Surveys," The Economic and Social Review, Economic and Social Studies, vol. 43(1), pages 67-98.
    9. Ebner, André, 2013. "A micro view on home equity withdrawal and its determinants: Evidence from Dutch households," Journal of Housing Economics, Elsevier, vol. 22(4), pages 321-337.
    10. Hassink, Wolter & Zweerink, Jochem, 2021. "Housing careers and the Great Recession," Journal of Housing Economics, Elsevier, vol. 51(C).
    11. Davis, Morris A. & Van Nieuwerburgh, Stijn, 2015. "Housing, Finance, and the Macroeconomy," Handbook of Regional and Urban Economics, in: Gilles Duranton & J. V. Henderson & William C. Strange (ed.), Handbook of Regional and Urban Economics, edition 1, volume 5, chapter 0, pages 753-811, Elsevier.
    12. Timothy Smeeding & Jonathan Gershuny & Karen Robson & Coady Wing, 2009. "Income Poverty and Income Support for Minority and Immigrant Children in Rich Countries," LIS Working papers 527, LIS Cross-National Data Center in Luxembourg.
    13. Andrea Brandolini & Silvia Magri & Timothy M. Smeeding, 2010. "Asset-based measurement of poverty," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 29(2), pages 267-284.
    14. Declan French & Donal McKillop & Tripti Sharma, 2017. "Analysis of Housing Equity Withdrawal by its Forms," CHaRMS Working Papers 17-04, Centre for HeAlth Research at the Management School (CHaRMS).
    15. Eva Sierminska & Yelena Takhtamanova, 2008. "The Effect of Wealth on Consumption Expenditures: Cross Country and Cross Socio-Demographic Group Comparisons," Ekonomia journal, Faculty of Economic Sciences, University of Warsaw, vol. 20.
    16. Chunil Kim & Hyobi Choi & Yeol Choi, 2021. "Retirement Age and Housing Consumption: The Case of South Korea," Sustainability, MDPI, vol. 13(3), pages 1-21, January.
    17. Carl Schwartz & Christine Lewis & David Norman & Tim Hampton, 2008. "Factors Influencing Housing Equity Withdrawal: Evidence from a Microeconomic Survey," The Economic Record, The Economic Society of Australia, vol. 84(267), pages 421-433, December.
    18. Janine Aron & John Muellbauer, 2006. "Housing Wealth, Credit Conditions and Consumption," CSAE Working Paper Series 2006-08, Centre for the Study of African Economies, University of Oxford.
    19. Christopher D. Carroll & Misuzu Otsuka & Jirka Slacalek, 2006. "How Large Is the Housing Wealth Effect? A New Approach," NBER Working Papers 12746, National Bureau of Economic Research, Inc.
    20. Frick, Joachim R. & Grabka, Markus M. & Smeeding, Timothy M. & Tsakloglou, Panos, 2010. "Distributional Effects of Imputed Rents in Five European Countries," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 19(3), pages 167-179.

    More about this item

    Keywords

    wealth; cross-national; private holdings; Luxembourg Wealth Study; home ownership; asset poverty; elderly; education; differences in wealth; public pension systems;
    All these keywords.

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:crr:crrwps:wp2007-03. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Amy Grzybowski or Christopher F Baum (email available below). General contact details of provider: https://edirc.repec.org/data/crrbcus.html .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.