IDEAS home Printed from https://ideas.repec.org/p/nbr/nberwo/2439.html
   My bibliography  Save this paper

Pension Wealth, Age-Wealth Profiles and the Distribution of Net Worth

Author

Listed:
  • Ann A. McDermed
  • Robert L. Clark
  • Steven G. Allen

Abstract

This study estimates the magnitude of pension wealth and compares pension wealth to net worth for households in the 1983 Survey of Consumer Finance (SCF). The SCF is the first data set to provide detailed information on both household finances and pension characteristics. The pension information is provided by the employer, so that it is much more detailed and likely to be more accurate than the pension data used in previous studies. Pension wealth was estimated under two sets of assumptions. Under the projected earnings approach, mean pension wealth is $98,291, which represents 43 percent of mean net worth for households with pensions. Under the legal method of calculating pension wealth, mean pension wealth is $47,541, which represents 26 percent of mean net worth for households with pensions. Both estimates are much larger than those obtained in earlier studies. The study also examines how estimates of inequality in the wealth distribution change when pension wealth is added to household balance sheets. Using a variety of methods and assumptions, the distribution becomes more equal when the definition of wealth is expanded to include pension assets.

Suggested Citation

  • Ann A. McDermed & Robert L. Clark & Steven G. Allen, 1987. "Pension Wealth, Age-Wealth Profiles and the Distribution of Net Worth," NBER Working Papers 2439, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:2439
    Note: LS
    as

    Download full text from publisher

    File URL: http://www.nber.org/papers/w2439.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Wise, David A., 1985. "Pensions, Labor, and Individual Choice," National Bureau of Economic Research Books, University of Chicago Press, number 9780226902937, December.
    2. Steven G. Allen & Robert L. Clark & Daniel A. Sumner, 1986. "Postretirement Adjustments of Pension Benefits," Journal of Human Resources, University of Wisconsin Press, vol. 21(1), pages 118-137.
    3. Robert B. Avery & Glenn B. Canner & Gregory E. Elliehausen & Thomas A. Gustafson, 1984. "Survey of consumer finances, 1983: a second report," Federal Reserve Bulletin, Board of Governors of the Federal Reserve System (U.S.), issue Dec, pages 857-868.
    4. Richard A. Ippolito, 1987. "Why Federal Workers Don't Quit," Journal of Human Resources, University of Wisconsin Press, vol. 22(2), pages 281-299.
    5. Ippolito, Richard A, 1985. "The Labor Contract and True Economic Pension Liabilities," American Economic Review, American Economic Association, vol. 75(5), pages 1031-1043, December.
    6. Robert B. Avery & Gregory E. Elliehausen & Thomas A. Gustafson, 1985. "Pensions and social security in household portfolios: evidence from the 1983 Survey of Consumer Finances," Research Papers in Banking and Financial Economics 81, Board of Governors of the Federal Reserve System (U.S.).
    7. Laurence J. Kotlikoff & David A. Wise, 1985. "Labor Compensation and the Structure of Private Pension Plans: Evidence for Contractual versus Spot Labor Markets," NBER Chapters, in: Pensions, Labor, and Individual Choice, pages 55-88, National Bureau of Economic Research, Inc.
    8. Robert B. Avery & Glenn B. Canner & Gregory E. Elliehausen & Thomas A. Gustafson, 1984. "Survey of consumer finances, 1983," Federal Reserve Bulletin, Board of Governors of the Federal Reserve System (U.S.), issue Sep, pages 679-692.
    9. Feldstein, Martin & Liebman, Jeffrey B., 2002. "Social security," Handbook of Public Economics, in: A. J. Auerbach & M. Feldstein (ed.), Handbook of Public Economics, edition 1, volume 4, chapter 32, pages 2245-2324, Elsevier.
    10. Robert L. Clark & Ann A. McDermed, 1986. "Earnings and Pension Compensation: The Effect of Eligibility," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 101(2), pages 341-361.
    11. Feldstein, Martin S, 1982. "Social Security and Private Saving: Reply," Journal of Political Economy, University of Chicago Press, vol. 90(3), pages 630-642, June.
    12. 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.
    13. David A. Wise, 1985. "Pensions, Labor, and Individual Choice," NBER Books, National Bureau of Economic Research, Inc, number wise85-1, May.
    14. Jeremy I. Bulow, 1982. "What are Corporate Pension Liabilities?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 97(3), pages 435-452.
    15. Olivia S. Mitchell, 1982. "Fringe Benefits and Labor Mobility," Journal of Human Resources, University of Wisconsin Press, vol. 17(2), pages 286-298.
    16. Munnell, Alicia H, 1976. "Private Pensions and Saving: New Evidence," Journal of Political Economy, University of Chicago Press, vol. 84(5), pages 1013-1032, October.
    17. Quinn, Joseph F, 1985. "Retirement Income Rights as a Component of Wealth in the United States," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 31(3), pages 223-236, September.
    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. Alan L. Gustman & Thomas L. Steinmeier, 2000. "Pensions and Retiree Health Benefits in Household Wealth: Changes from 1969 to 1992," Journal of Human Resources, University of Wisconsin Press, vol. 35(1), pages 30-50.
    2. Michael D. Hurd, 1989. "Issues and Results from Research on the Elderly I: Economic Status (Part I of III Parts)," NBER Working Papers 3018, National Bureau of Economic Research, Inc.
    3. Auerbach, A.J. & Kotlikoff, L.J. & Weil, D.N., 1992. "The Increasing Annuitization of the Elderly - Estimates and Implications for Intergenerational Transfers, Inequality and National Saving," Papers 6, Boston University - Department of Economics.
    4. Jang-Ting Guo & Kevin J. Lansing, 1994. "The welfare effects of tax simplification: a general-equilibrium analysis," Working Papers (Old Series) 9409, Federal Reserve Bank of Cleveland.
    5. Kevin J. Lansing, 1993. "Dynamic optimal fiscal and monetary policy in a business cycle model with income redistribution," Working Papers (Old Series) 9308, Federal Reserve Bank of Cleveland.
    6. Arthur B. Kennickell & Annika E. Sunden, 1997. "Pensions, social security, and the distribution of wealth," Finance and Economics Discussion Series 1997-55, Board of Governors of the Federal Reserve System (U.S.).
    7. Alan L. Gustman & Olivia S. Mitchell & Andrew A. Samwick & Thomas L. Steinmeier, "undated". "Pension and Social Security Wealth in the Health and Retirement Study," Pension Research Council Working Papers 97-3, Wharton School Pension Research Council, University of Pennsylvania.

    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. Robert L. Clark & Joseph F. Quinn, 1999. "Effects of Pensions on Labor Markets and Retirement," Boston College Working Papers in Economics 431, Boston College Department of Economics.
    2. Steven G. Allen & Robert L. Clark & Ann A. McDermed, 1991. "Pensions, Bonding, and Lifetime Jobs," NBER Working Papers 3688, National Bureau of Economic Research, Inc.
    3. Steven G. Allen & Robert L. Clark, 1987. "Pensions and Firm Performance," NBER Working Papers 2266, National Bureau of Economic Research, Inc.
    4. Gustman, A.L. & Mitchell, O.S. & Steinmeier, T.L., 1993. "The Role of Pensions in the Labor Market," Papers 93-07, Cornell - Center for Advanced Human Resource Studies.
    5. Gustman, Alan L. & Steinmeier, Thomas L., 1993. "Pension portability and labor mobility : Evidence from the survey of income and program participation," Journal of Public Economics, Elsevier, vol. 50(3), pages 299-323, March.
    6. Richard Disney & Carl Emmerson, 2002. "Choice of pension scheme and job mobility in Britain," IFS Working Papers W02/09, Institute for Fiscal Studies.
    7. Andrietti, Vincenzo, 2000. "Occupational pensions and interfirm job mobility in the European Union. Evidence from the ECHP survey," ISER Working Paper Series 2000-07, Institute for Social and Economic Research.
    8. Alan L. Gustman & Thomas L. Steinmeier, 1988. "An Analysis Of Pension Benefit Formulas, Pension Wealth And Incentives From Pensions," NBER Working Papers 2535, National Bureau of Economic Research, Inc.
    9. Jonathan Gruber, 1998. "Health Insurance and the Labor Market," NBER Working Papers 6762, National Bureau of Economic Research, Inc.
    10. Clark, Robert L. & McDermed, Ann A., 1988. "Do Employment Contracts Alter Earnings Profiles?," Department of Economics and Business - Archive 259435, North Carolina State University, Department of Economics.
    11. David McCarthy, 2003. "A Lifecycle Analysis of Defined Benefit Pension Plans," Working Papers wp053, University of Michigan, Michigan Retirement Research Center.
    12. Alan L. Gustman & Thomas L. Steinmeier, 1989. "Evaluating Pension Policies in a Model with Endogeous Contributions," NBER Working Papers 3085, National Bureau of Economic Research, Inc.
    13. Johnson, Richard W., 1997. "Pension Underfunding and Liberal Retirement Benefits Among State and Local Government Workers," National Tax Journal, National Tax Association, vol. 50(1), pages 113-42, March.
    14. Robin L. Lumsdaine & David A. Wise, 1994. "Aging and Labor Force Participation: A Review of Trends and Explanations," NBER Chapters, in: Aging in the United States and Japan: Economic Trends, pages 7-42, National Bureau of Economic Research, Inc.
    15. Alan L. Gustman & F. Thomas Juster, 1995. "Income and Wealth of Older American Households: Modeling Issues for Public Policy Analysis," NBER Working Papers 4996, National Bureau of Economic Research, Inc.
    16. Johnson, Richard W., 1997. "Pension Underfunding and Liberal Retirement Benefits Among State and Local Government Workers," National Tax Journal, National Tax Association;National Tax Journal, vol. 50(1), pages 113-142, March.
    17. Andrietti, Vincenzo, 2004. "Pension choices and job mobility in the UK," UC3M Working papers. Economics we043713, Universidad Carlos III de Madrid. Departamento de Economía.
    18. Arnds, Pascal & Bonin, Holger, 2002. "Frühverrentung in Deutschland: Ökonomische Anreize und institutionelle Strukturen," IZA Discussion Papers 666, Institute of Labor Economics (IZA).
    19. ANDRIETTI Vincenzo, 2000. "Portability of Supplementary Pension Rights in the European Union," IRISS Working Paper Series 2000-01, IRISS at CEPS/INSTEAD.
    20. Alan L. Gustman & Thomas L. Steinmeier, 1987. "Pensions, Efficiency Wages, and Job Mobility," NBER Working Papers 2426, National Bureau of Economic Research, Inc.

    More about this item

    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:nbr:nberwo:2439. 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: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/nberrus.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.