Accounting for the Heterogeneity in Retirement Wealth

38 Pages Posted: 26 Mar 2009

See all articles by Fang Yang

Fang Yang

Louisiana State University, Baton Rouge

Multiple version iconThere are 2 versions of this paper

Date Written: August 2008

Abstract

This paper studies a quantitative dynamic general equilibrium life-cycle model where parents and their children are linked by bequests, both voluntary and accidental, and by the transmission of earnings ability. This model is able to match very well the empirical observation that households with similar lifetime earnings hold very different amounts of wealth at retirement. Earnings heterogeneity and borrowing constraints are essential in generating the variation in wealth at retirement among low lifetime earnings households, while inheritance heterogeneity helps to generate the heterogeneity in wealth at retirement among high lifetime earnings households.

Suggested Citation

Yang, Fang, Accounting for the Heterogeneity in Retirement Wealth (August 2008). Available at SSRN: https://ssrn.com/abstract=1368539 or http://dx.doi.org/10.2139/ssrn.1368539

Fang Yang (Contact Author)

Louisiana State University, Baton Rouge ( email )

Baton Rouge, LA 70803
United States

HOME PAGE: http://faculty.bus.lsu.edu/fyang/

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