Assets and Wealth - Data Sources, The Distribution Of Wealth Among Older Americans, Theory
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This entry deals with the wealth holdings of older Americans and also addresses a number of interrelated issues, such as how much wealth the typical older household owns and in what form they decide to hold their wealth. The more difficult question of why some older American households have accumulated so much wealth while many others have almost nothing at all is also discussed. Finally, this entry explores what the future plans of the elderly might be about the disposition of this wealth.
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Until the last decades of the twentieth century, little was known about the wealth of older adults. This was unfortunate since household wealth is an important complementary measure of command over economic resources. While we knew a good deal about income differences, little was known about how much personal wealth older people had and how and why that wealth got distributed. The principal reason…
To document patterns of wealth disparities among older Americans, Table 1 presents estimates of mean net worth by race and ethnicity obtained from the baseline 1993 AHEAD survey. This table also separates total household wealth into its principal component parts—housing equity, financial assets, and tangible assets (cars, business, real estate other than the main home). Expressed in July 20…
What are the primary motives for wealth accumulation and savings that produce such large diversity in wealth holdings among older households? The most widely known model is the life-cycle model, which emphasizes savings (and dissavings) to deal with timing issues surrounding noncoincidence in income and consumption (see Browning and Lusardi). In this theory, individuals will tend to want to …
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