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Pensions and Retiree Health Benefits in Household Wealth: Changes from 1969 to 1992

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  • Alan L. Gustman
  • Thomas L. Steinmeier

Abstract

By 1992, pensions and retiree health insurance represented one quarter of the wealth of families on the verge of retirement. Our simulations suggest that between 1969 and 1992, abstracting from the effects of changes in wages and years of covered work on pension benefit amounts, changing pension coverage and changing pension plan provisions would have raised the total wealth of each household in the Health and Retirement Study by $67,000 in 1992 dollars, raising wealth from employer provided pension benefits per household by 150 percent in real terms. Changes in retiree health benefits, which have only about 7 percent of the value of pensions, experienced similar real growth, increasing in value by $3,700 in 1992 dollars. Most of the increase in pension values and in the value of retiree health insurance plans was due to improvements in real benefits among covered workers. All classes of wealth holders enjoyed increased wealth from employer provided retirement plans, but those in the top half of the wealth distribution enjoyed increases that were much larger in absolute terms and also were larger in relation to their total wealth than were the increases experienced by those in the bottom half of the wealth distribution.

Suggested Citation

  • Alan L. Gustman & Thomas L. Steinmeier, 1999. "Pensions and Retiree Health Benefits in Household Wealth: Changes from 1969 to 1992," NBER Working Papers 7320, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:7320 Note: AG
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    References listed on IDEAS

    as
    1. Ann McDermed & Robert L. Clark & Steven G. Allen, 1989. "Pension Wealth, Age-Wealth Profiles, and the Distribution of Net Worth," NBER Chapters,in: The Measurement of Saving, Investment, and Wealth, pages 689-736 National Bureau of Economic Research, Inc.
    2. 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.
    3. Olivia S. Mitchell & Jan Olson & Thomas Steinmeier, "undated". "Construction of the Earnings and Benefits File (EBF) for Use with the Health and Retirement Survey," Pension Research Council Working Papers 98-19, Wharton School Pension Research Council, University of Pennsylvania.
    4. John Rust & Christopher Phelan, 1997. "How Social Security and Medicare Affect Retirement Behavior in a World of Incomplete Markets," Econometrica, Econometric Society, vol. 65(4), pages 781-832, July.
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    More about this item

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth

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