Lifetime Earnings and Heterogeneity in Retirement Wealth: the Role of Bequests, Minimum Consumption, and Social Security
نویسنده
چکیده
Micro data shows a significant dispersion in wealth at retirement at all levels of lifetime earnings and a weak correlation between lifetime earnings and retirement wealth. Previous research has shown that standard models have trouble generating these important features of the data. This paper studies a quantitative general equilibrium lifecycle model with intergenerational links of voluntary and accidental bequests and ability, government-provided minimum consumption, a history-dependent Social Security system and defined benefit pensions. This model is able to match very well these empirical observations. I analyze the role of each model feature in generating the relationship between lifetime earnings and retirement wealth.
منابع مشابه
Bequests and Heterogeneity in Retirement Wealth∗
The data show large dispersion in households’ wealth holdings at retirement. In addition, the empirical correlation between household lifetime earnings and retirement wealth is much lower in the data than in many quantitative models. This paper quantifies and analyzes the implications of a life cycle model with intergenerational links (in the form of voluntary bequest motives and intergeneratio...
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