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The Age‐Wealth Profile And The Life‐Cycle Hypothesis: A Cohort Analysis With A Time Series Of Cross‐Sections Of Italian Households

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  • Tullio Jappelli

Abstract

In this paper I estimate the age‐wealth profile under two different identification assumptions about age, cohort and time effects. According to the life‐cycle model, the two sets of assumptions should yield similar age‐wealth profiles. Using the 1984–93 Italian Survey of Household Income and Wealth, the estimated average annual rate of wealth decumulation in old age is found to be between 3 and 6 percent. As in the life‐cycle model, the cohort effect increases with year of birth. However, the results also uncover considerable population heterogeneity: the rates of wealth decumulation are much lower for rich households and households headed by individuals with higher education.

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  • Tullio Jappelli, 1999. "The Age‐Wealth Profile And The Life‐Cycle Hypothesis: A Cohort Analysis With A Time Series Of Cross‐Sections Of Italian Households," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 45(1), pages 57-75, March.
    • Handle: RePEc:bla:revinw:v:45:y:1999:i:1:p:57-75
    DOI: 10.1111/j.1475-4991.1999.tb00312.x
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    1. Richard T. Curtin & Thomas Juster & James N. Morgan, 1989. "Survey Estimates of Wealth: An Assessment of Quality," NBER Chapters, in: The Measurement of Saving, Investment, and Wealth, pages 473-552, National Bureau of Economic Research, Inc.
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    JEL classification:

    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth

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