Identifying Drivers for the Accumulation of Household Financial Wealth
40 Pages Posted: 20 Feb 2013 Last revised: 3 Mar 2014
Date Written: February 11, 2013
Household financial assets and liabilities display considerable variation across countries and over time. This article investigates empirically the role of some of the key Life Cycle Model variables and other relevant factors behind household financial wealth disparities using data from 40 countries over the period 1995-2009. To the author's knowledge, it uses the largest macroeconomic dataset on household financial assets and liabilities assembled to date. The results are in line with the aggregative implications of the Life Cycle Model in that the wealth-to-income ratio decreases with income per capita growth and increases with the expected length of retirement. The study also presents empirical evidence for the role of financial and demographic developments on the accumulation of financial assets and liabilities by the household sector.
Keywords: Household sector balance sheets, financial wealth, household assets, household liabilities, financial development
JEL Classification: E01, E21
Suggested Citation: Suggested Citation