The Age-Wealth Profile and the Life-Cycle Hypothesis: A Cohort Analysis with a Time Series of Cross-Sections of Italian Households

Jappelli, Tullio

doi:10.2139/ssrn.156529

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The Age-Wealth Profile and the Life-Cycle Hypothesis: A Cohort Analysis with a Time Series of Cross-Sections of Italian Households

Centre for the Study of Economics and Finance (CSEF) Working Paper No. 14, 1999

35 Pages Posted: 8 Jul 1999

See all articles by Tullio Jappelli

Tullio Jappelli

University of Naples Federico II - Department of Economics and Statistics; Centre for Economic Policy Research (CEPR); European Corporate Governance Institute (ECGI); Center for Studies in Economics and Finance - CSEF; CSEF - University of Naples Federico II - Centre for Studies in Economics and Finance (CSEF)

There are 2 versions of this paper

Date Written: January 1999

Abstract

In this paper I estimate the age-wealth profile under two different identification assumptions about age, cohort and time effects. According to the life-cycle model, the two sets of assumptions should yield similar age-wealth profiles. Using the 1984-1993 Italian Survey of Household Income and Wealth, the estimated average annual rate of wealth decumulation in old age is found to be between 3 and 6 percent. As in the life-cycle model, the cohort effect increases with year of birth. However, the results uncover also considerable population heterogeneity: the rates of wealth decumulation are much lower for rich households and households headed by individuals with higher education.

JEL Classification: E21

Suggested Citation: Suggested Citation

Jappelli, Tullio, The Age-Wealth Profile and the Life-Cycle Hypothesis: A Cohort Analysis with a Time Series of Cross-Sections of Italian Households (January 1999). Centre for the Study of Economics and Finance (CSEF) Working Paper No. 14, 1999, Available at SSRN: https://ssrn.com/abstract=156529 or http://dx.doi.org/10.2139/ssrn.156529