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

Author Info

Listed author(s):
  • 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.

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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/
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Paper provided by Center for Retirement Research in its series Working Papers, Center for Retirement Research at Boston College with number wp2007-03.

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Length: 42 pages
Date of creation: Feb 2007
Date of revision: Feb 2007
Handle: RePEc:crr:crrwps:wp2007-03
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Keywords: wealth; cross-national; private holdings; Luxembourg Wealth Study; home ownership; asset poverty; elderly; education; differences in wealth; public pension systems;

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  1. Atkinson, Tony & Cantillon, Bea & Marlier, Eric & Nolan, Brian, 2002. "Social Indicators: The EU and Social Inclusion," OUP Catalogue, Oxford University Press, number 9780199253494.
  2. 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.
  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. François Ortalo-Magné & Sven Rady, 2006. "Housing Market Dynamics: On the Contribution of Income Shocks and Credit Constraints ," Review of Economic Studies, Oxford University Press, vol. 73(2), pages 459-485.
  5. Michael D. Hurd & Susann Rohwedder, 2006. "Some Answers to the Retirement-Consumption Puzzle," NBER Working Papers 12057, National Bureau of Economic Research, Inc.
  6. Pietro Catte & Nathalie Girouard & Robert W. R. Price & Christophe André, 2004. "Housing Markets, Wealth and the Business Cycle," OECD Economics Department Working Papers 394, OECD Publishing.
  7. 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).
  8. Arie Kapteyn & Constantijn Panis, 2003. "The Size and Composition of Wealth Holdings in the United States, Italy, and the Netherlands," Working Papers 03-05, RAND Corporation.
  9. 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.
  10. Tatsiramos, Konstantinos, 2006. "Residential Mobility and Housing Adjustment of Older Households in Europe," IZA Discussion Papers 2435, Institute for the Study of Labor (IZA).
  11. 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.
  12. 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.
  13. 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.
  14. 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," Journals of Gerontology: Series B, Gerontological Society of America, vol. 62(2), pages 120-128.
  15. 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.
  16. 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.
  17. 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.
  18. 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.
  19. 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.
  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. 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.
  22. 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.
  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. 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.
  25. Annika Sunde´n, 2006. "The Swedish Experience with Pension Reform," Oxford Review of Economic Policy, Oxford University Press, vol. 22(1), pages 133-148, Spring.
  26. 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.
  27. 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.
  28. 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).
  29. Timothy M. Smeeding, 1999. "Social Security Reform: Improving Benefit Adequacy and Economic Security for Women," Center for Policy Research Policy Briefs 16, Center for Policy Research, Maxwell School, Syracuse University.
  30. Quinn, Joseph F, 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.
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Cited by:

  1. Dekkers, Gijs, 2008. "Are the old poor? A discussion and some cursory evidence," MPRA Paper 29436, University Library of Munich, Germany.
  2. 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.
  3. 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.

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