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Lifecycle Patterns of Saving and Wealth Accumulation

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Abstract

Empirical analysis of U.S. income, saving and wealth dynamics is constrained by a lack of high-quality and comprehensive household-level panel data. This paper uses a pseudo-panel approach, tracking types of agents by birth cohort and across time through a series of cross-section snapshots synthesized with macro aggregates. The key micro source data is the Survey of Consumer Finances (SCF), which captures the top of the wealth distribution by sampling from administrative records. The SCF has the detailed balance sheet components, incomes, and interfamily transfers needed to use both sides of the intertemporal budget constraint and thus solve for saving and consumption. The results here are consistent with recent papers based on individual panel data from countries with administrative registries, and highlights the different roles of saving, capital gains, and interfamily transfers in wealth change over the lifecycle and across permanent income groups.

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  • Laura Feiveson & John Edward Sabelhaus, 2019. "Lifecycle Patterns of Saving and Wealth Accumulation," Finance and Economics Discussion Series 2019-010, Board of Governors of the Federal Reserve System (U.S.).
    • Handle: RePEc:fip:fedgfe:2019-10
    DOI: 10.17016/FEDS.2019.010
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    Cited by:

    1. Luis Buluz & Filip Novokmet & Moritz Schularick, 2022. "The Anatomy of the Global Saving Glut," SciencePo Working papers Main hal-03881419, HAL.
    2. Sandra E. Black & Paul J. Devereux & Fanny Landaud & Kjell G. Salvanes, 2022. "The (Un)Importance of Inheritance," CESifo Working Paper Series 9566, CESifo.
    3. Matthew Smith & Owen Zidar & Eric Zwick, 2020. "Top Wealth in America: New Estimates and Implications for Taxing the Rich," Working Papers 264, Princeton University, Department of Economics, Center for Economic Policy Studies..
    4. Klaus Grünberger & Judith Derndorfer & Matthias Schnetzer, 2024. "Erbschaften in Österreich: eine Modellschätzung intergenerationeller Vermögenstransfers bis 2050," Wirtschaft und Gesellschaft - WuG, Kammer für Arbeiter und Angestellte für Wien, Abteilung Wirtschaftswissenschaft und Statistik, vol. 50(1), pages 21-41.

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    More about this item

    Keywords

    Consumption; Household income; Lifecycle; Saving; Wealth;
    All these keywords.

    JEL classification:

    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions

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