RETIREMENT WEALTH AND LIFETIME EARNINGS
| Autor: | Lutz Hendricks |
|---|---|
| Rok vydání: | 2007 |
| Předmět: |
Rate of return
Economics and Econometrics Labour economics Inequality Earnings business.industry media_common.quotation_subject education Distribution (economics) Wealth elasticity of demand Panel Study of Income Dynamics Economics National wealth Marginal distribution business health care economics and organizations media_common |
| Zdroj: | International Economic Review. 48:421-456 |
| ISSN: | 1468-2354 0020-6598 |
| Popis: | This article argues that a satisfactory theory of wealth inequality should account not only for the marginal distribution of wealth, but also for the joint distribution of wealth and earnings. The article describes the joint distribution of retirement wealth and lifetime earnings in the Panel Study of Income Dynamics. It then evaluates the ability of a stochastic life-cycle model to account for key features of this distribution. The life-cycle model fails to account for three key features of the data. (1) The correlation between lifetime earnings and retirement wealth is too high. (2) The wealth gaps between earnings rich and earnings poor households are too large. (3) Wealth inequality among households with similar lifetime earnings is too small. Models in which households differ in rates of return or time preferences account much better for the joint distribution of retirement wealth and lifetime earnings. |
| Databáze: | OpenAIRE |
| Externí odkaz: |
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