Ethnicity and Retirement Wealth
32 Pages Posted: 23 Jun 2011
Date Written: May 13, 2011
While it is understood that differing ethnic groups have differing income and therefore differing capacity to save for retirement, it is not generally recognized that differing genders and ethnic groups do not save the same even if income is equalized. This article contributes to the discussion by studying the determinants of retirement wealth across a range of ethnicities, including White, Pasifika and Asian. Differences in retirement wealth between ethnic groups is relatively unexplored outside of the USA.
The article uses data from a detailed nation-wide survey to examine what demographic factors and socio economic factors are the main determinants of retirement wealth. Gender and ethnicity are found to be a strong predictor of retirement wealth even after controlling for all other factors. Hence effective retirement wealth policy has to take account of ethnic/cultural differences. While the focus is on New Zealanders the results are applicable world-wide.
Keywords: Retirement wealth, ethnicity, race, behavioral finance
JEL Classification: D14, D31, D91, I39, J15, J26
Suggested Citation: Suggested Citation