We use microdata on a large number of European countries from the Survey of Health, Ageing and Retirement in Europe (SHARE) to examine the wealth accumulation (saving) behavior of the retired elderly in Europe. We find that less than half of the retired elderly in Europe are decumulating their wealth and that the average wealth accumulation rate of the retired elderly in Europe is positive though relatively moderate (6.6 percent over a 3-year period). These findings suggest that the Wealth Decumulation Puzzle (the tendency of the retired elderly to not decumulate their wealth or to decumulate their wealth more slowly than expected) applies in the case of Europe. Moreover, our regression results suggest that bequest motives, generous public pension systems, and the reluctance of retired elderly homeowners to sell or borrow against their owner-occupied housing are the primary explanations for the existence of the Wealth Decumulation Puzzle in Europe.
{"title":"Do the Retired Elderly in Europe Decumulate Their Wealth? The Importance of Bequest Motives, Precautionary Saving, Public Pensions, and Homeownership","authors":"Charles Yuji Horioka, Luigi Ventura","doi":"10.1111/roiw.12632","DOIUrl":"https://doi.org/10.1111/roiw.12632","url":null,"abstract":"We use microdata on a large number of European countries from the Survey of Health, Ageing and Retirement in Europe (SHARE) to examine the wealth accumulation (saving) behavior of the retired elderly in Europe. We find that less than half of the retired elderly in Europe are decumulating their wealth and that the average wealth accumulation rate of the retired elderly in Europe is positive though relatively moderate (6.6 percent over a 3-year period). These findings suggest that the Wealth Decumulation Puzzle (the tendency of the retired elderly to not decumulate their wealth or to decumulate their wealth more slowly than expected) applies in the case of Europe. Moreover, our regression results suggest that bequest motives, generous public pension systems, and the reluctance of retired elderly homeowners to sell or borrow against their owner-occupied housing are the primary explanations for the existence of the Wealth Decumulation Puzzle in Europe.","PeriodicalId":47853,"journal":{"name":"Review of Income and Wealth","volume":null,"pages":null},"PeriodicalIF":2.0,"publicationDate":"2022-12-22","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"138537334","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Nicolas Hérault, Dean Hyslop, Stephen P. Jenkins, Roger Wilkins
Using income tax administrative data for Australia, we examine levels and trends in the persistence in top-income group membership, focusing on the top 1 percent. Top-income persistence increased markedly between 1991 and 2018, with most of the increase occurring in the mid-2000s and early 2010s. In the mid- to late-2010s, Australian top-income persistence rates were near the top of the range of tax-data estimates for other countries. We decompose the increase into factors associated with (i) changes in the composition of the top-income group and (ii) increases in persistence rates for specific population subgroups. We find that the rise in top-income persistence is accounted for by changes in subgroup persistence rates, notably for individuals aged 35–64, and especially those aged 55–64. We suggest that these effects are partially related to increases in the effective retirement age over the relevant period.
{"title":"Rising top-income persistence in Australia: Evidence from income tax data","authors":"Nicolas Hérault, Dean Hyslop, Stephen P. Jenkins, Roger Wilkins","doi":"10.1111/roiw.12628","DOIUrl":"https://doi.org/10.1111/roiw.12628","url":null,"abstract":"Using income tax administrative data for Australia, we examine levels and trends in the persistence in top-income group membership, focusing on the top 1 percent. Top-income persistence increased markedly between 1991 and 2018, with most of the increase occurring in the mid-2000s and early 2010s. In the mid- to late-2010s, Australian top-income persistence rates were near the top of the range of tax-data estimates for other countries. We decompose the increase into factors associated with (i) changes in the composition of the top-income group and (ii) increases in persistence rates for specific population subgroups. We find that the rise in top-income persistence is accounted for by changes in subgroup persistence rates, notably for individuals aged 35–64, and especially those aged 55–64. We suggest that these effects are partially related to increases in the effective retirement age over the relevant period.","PeriodicalId":47853,"journal":{"name":"Review of Income and Wealth","volume":null,"pages":null},"PeriodicalIF":2.0,"publicationDate":"2022-12-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"138537319","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"The Effect of Labor's Bargaining Power on Wealth Inequality in the UK, USA, And France","authors":"B. Tippet, Özlem Onaran, Rafael Wildauer","doi":"10.1111/roiw.12626","DOIUrl":"https://doi.org/10.1111/roiw.12626","url":null,"abstract":"","PeriodicalId":47853,"journal":{"name":"Review of Income and Wealth","volume":null,"pages":null},"PeriodicalIF":2.0,"publicationDate":"2022-12-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"72500343","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Generalizing the Stochastic Approach to Price Indexes","authors":"Adam Gorajek","doi":"10.1111/roiw.12624","DOIUrl":"https://doi.org/10.1111/roiw.12624","url":null,"abstract":"","PeriodicalId":47853,"journal":{"name":"Review of Income and Wealth","volume":null,"pages":null},"PeriodicalIF":2.0,"publicationDate":"2022-12-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"72416968","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"The Role of Banks in Shaping Income Inequality: A Within‐Country Study","authors":"Paolo Coccorese, R. Dell’Anno","doi":"10.1111/roiw.12629","DOIUrl":"https://doi.org/10.1111/roiw.12629","url":null,"abstract":"","PeriodicalId":47853,"journal":{"name":"Review of Income and Wealth","volume":null,"pages":null},"PeriodicalIF":2.0,"publicationDate":"2022-12-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"82128560","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Due to outdated weighting information, a Laspeyres-based Consumer Price Index (CPI) is prone to accumulating upward bias. Therefore, the present study introduces and examines simple and transparent revision approaches that retrospectively address the source of the bias. They provide a consistent long-run time series of the CPI and they require no additional information. Furthermore, a coherent decomposition of the bias into the contributions of individual product groups is developed. In a case study, the approaches are applied to a Laspeyresbased CPI. The empirical results confirm the theoretical predictions. The proposed revision approaches are not only adoptable to most national CPIs, but also to other price level measures such as the producer price index or the import and export price
{"title":"Retrospective Computations of Price Index Numbers: Theory and Application","authors":"Ludwig von Auer, Alena Shumskikh","doi":"10.1111/roiw.12627","DOIUrl":"https://doi.org/10.1111/roiw.12627","url":null,"abstract":"Due to outdated weighting information, a Laspeyres-based Consumer Price Index (CPI) is prone to accumulating upward bias. Therefore, the present study introduces and examines simple and transparent revision approaches that retrospectively address the source of the bias. They provide a consistent long-run time series of the CPI and they require no additional information. Furthermore, a coherent decomposition of the bias into the contributions of individual product groups is developed. In a case study, the approaches are applied to a Laspeyresbased CPI. The empirical results confirm the theoretical predictions. The proposed revision approaches are not only adoptable to most national CPIs, but also to other price level measures such as the producer price index or the import and export price","PeriodicalId":47853,"journal":{"name":"Review of Income and Wealth","volume":null,"pages":null},"PeriodicalIF":2.0,"publicationDate":"2022-12-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"79839137","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
I provide lower and upper bound estimates of inequality of opportunity (IOp) for 24 European countries, between 2005 and 2011. Previous estimates of IOp are lower bounds of its true level and provide a partial view of the importance of involuntarily inherited factors. Upper bound estimates of IOp are much larger than their corresponding lower bound estimates. While the lower bound estimates of IOp account for up to 31% of total inequality, the upper bound estimates account for up to 90.5%, suggesting that IOp can be as high as total inequality of outcomes. Indeed, inequality of outcomes has a higher correlation with the upper bound estimates of IOp than with the lower bound estimates, both cross sectionally and over time.
{"title":"Upper and Lower Bound Estimates of Inequality of Opportunity: A Cross‐National Comparison for Europe","authors":"Rafael Carranza","doi":"10.1111/roiw.12622","DOIUrl":"https://doi.org/10.1111/roiw.12622","url":null,"abstract":"I provide lower and upper bound estimates of inequality of opportunity (IOp) for 24 European countries, between 2005 and 2011. Previous estimates of IOp are lower bounds of its true level and provide a partial view of the importance of involuntarily inherited factors. Upper bound estimates of IOp are much larger than their corresponding lower bound estimates. While the lower bound estimates of IOp account for up to 31% of total inequality, the upper bound estimates account for up to 90.5%, suggesting that IOp can be as high as total inequality of outcomes. Indeed, inequality of outcomes has a higher correlation with the upper bound estimates of IOp than with the lower bound estimates, both cross sectionally and over time.","PeriodicalId":47853,"journal":{"name":"Review of Income and Wealth","volume":null,"pages":null},"PeriodicalIF":2.0,"publicationDate":"2022-10-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"83639339","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We document the intergenerational persistence of wealth between adult offspring and their parent’s using the Wealth and Assets Survey for Great Britain. We estimate an intergenerational wealth elasticity of 0.4 and rank-rank elasticity of 0.3 and find wealth persistence for individuals in their 60s is lower than for those currently aged in their 30s and early 40s, though rank based estimates are stable. We estimate that the intergenerational wealth elasticity is 3.8 percentage points higher when comparing people with those the same age six years previously suggesting strong evidence of higher intergenerational wealth persistence in younger age cohorts.
{"title":"Intergenerational wealth transmission in Great Britain","authors":"P. Gregg, Ricky Kanabar","doi":"10.1111/roiw.12620","DOIUrl":"https://doi.org/10.1111/roiw.12620","url":null,"abstract":"We document the intergenerational persistence of wealth between adult offspring and their parent’s using the Wealth and Assets Survey for Great Britain. We estimate an intergenerational wealth elasticity of 0.4 and rank-rank elasticity of 0.3 and find wealth persistence for individuals in their 60s is lower than for those currently aged in their 30s and early 40s, though rank based estimates are stable. We estimate that the intergenerational wealth elasticity is 3.8 percentage points higher when comparing people with those the same age six years previously suggesting strong evidence of higher intergenerational wealth persistence in younger age cohorts.","PeriodicalId":47853,"journal":{"name":"Review of Income and Wealth","volume":null,"pages":null},"PeriodicalIF":2.0,"publicationDate":"2022-10-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"74539216","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"The Intergenerational Effects of Recessions","authors":"Diana Alessandrini, Bharat Diwakar","doi":"10.1111/roiw.12619","DOIUrl":"https://doi.org/10.1111/roiw.12619","url":null,"abstract":"","PeriodicalId":47853,"journal":{"name":"Review of Income and Wealth","volume":null,"pages":null},"PeriodicalIF":2.0,"publicationDate":"2022-10-17","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"78936748","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Underreporting of Top Incomes and Inequality: A Comparison of Correction Methods using Simulations and Linked Survey and Tax Data","authors":"Emmanuel Flachaire, N. Lustig, Andrea Vigorito","doi":"10.1111/roiw.12618","DOIUrl":"https://doi.org/10.1111/roiw.12618","url":null,"abstract":"","PeriodicalId":47853,"journal":{"name":"Review of Income and Wealth","volume":null,"pages":null},"PeriodicalIF":2.0,"publicationDate":"2022-10-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"81011496","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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