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Wealth Accumulation of US Households: What do we learn from the SIPP data?

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  • Hildebrand, Vincent

    (York University, Canada and CEPS/INSTEAD, Luxembourg)

Abstract

In this paper, I estimate, for US households, age-wealth profiles which allow for cohort effects. I use these to reexamine one of the central empirical propositions simple life-cycle models: dissaving after retirement. The analysis employs a data set which has not been previously examined in this way: the Survey of Income and Program Participation (SIPP). The main regression results suggest that elderly households do not dissave after retirement. However, an examination of the distribution of wealth at retirement reveals that most households have accumulated very little wealth from which to dissave. Given that about 40% of households are not covered by any occupational pension, social security payments are the main source retirement income for a large number of households. Even more than the absence of post-retirement dissaving, it is this overall lack of pre-retirement saving which seems to contradict standard life-cycle models.

Suggested Citation

  • Hildebrand, Vincent, 2001. "Wealth Accumulation of US Households: What do we learn from the SIPP data?," IRISS Working Paper Series 2001-01, IRISS at CEPS/INSTEAD.
  • Handle: RePEc:irs:iriswp:2001-01
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    Cited by:

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    3. Hisham S. El‐Osta & Ashok K. Mishra & Mitchell J. Morehart, 2007. "Determinants of economic well‐being among U.S. farm operator households," Agricultural Economics, International Association of Agricultural Economists, vol. 36(3), pages 291-304, May.
    4. Barry P. Bosworth & Ralph C. Bryant & Gary Burtless, 2004. "The Impact of Aging on Financial Markets and the Economy: A Survey," Working Papers, Center for Retirement Research at Boston College 2004-23, Center for Retirement Research.

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    More about this item

    Keywords

    Wealth Accumulation ; Life Cycle Models ; Cohort Analysis;
    All these keywords.

    JEL classification:

    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

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