Asset Holdings and the Life Cycle
Empirical studies of the life cycle savings model have tended to rej ect the hypothesis of a "hump-shaped" pattern for the wealth-age profile. In this paper we show, using new data on net worth for 12,734 families, that there is evidence that wealth declines after retirement provided that we control for differences in permanent income and take account of sample selection bias. The estimated rates of decumulation are consistent with a life cycle model in which there is uncertainty about the date of death.
|Date of creation:||Jan 1981|
|Date of revision:|
|Publication status:||published as King, M. A. and Dicks-Mireaux, L-D. L. "Asset Holdings and the Life Cycle." Economic Journal, Vol. 92, No. 366 (June 1982), pp. 247-267.|
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- Melino, Angelo, 1982. "Testing for Sample Selection Bias," Review of Economic Studies, Wiley Blackwell, vol. 49(1), pages 151-53, January.
- Heckman, James J, 1979.
"Sample Selection Bias as a Specification Error,"
Econometric Society, vol. 47(1), pages 153-61, January.
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- Eden, Benjamin & Pakes, Ariel, 1981.
"On Measuring the Variance-Age Profile of Lifetime Earnings,"
Review of Economic Studies,
Wiley Blackwell, vol. 48(3), pages 385-94, July.
- Benjamin Eden & Ariel Pakes, 1981. "On Measuring the Variance-Age Profile of Lifetime Earnings," UCLA Economics Working Papers 196, UCLA Department of Economics.
- Hall, Robert E, 1978. "Stochastic Implications of the Life Cycle-Permanent Income Hypothesis: Theory and Evidence," Journal of Political Economy, University of Chicago Press, vol. 86(6), pages 971-87, December.
- Davies, James B, 1981. "Uncertain Lifetime, Consumption, and Dissaving in Retirement," Journal of Political Economy, University of Chicago Press, vol. 89(3), pages 561-77, June.
- Greene, William H, 1981. "Sample Selection Bias as a Specification Error: Comment," Econometrica, Econometric Society, vol. 49(3), pages 795-98, May.
- Atkinson, A B, 1971. "The Distribution of Wealth and the Individual Life-cycle," Oxford Economic Papers, Oxford University Press, vol. 23(2), pages 239-54, July.
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