Lifecycle Patterns of Saving and Wealth Accumulation
64 Pages Posted: 19 Feb 2019 Last revised: 21 Feb 2019
Date Written: 2019-02-15
Empirical analysis of U.S. income, saving and wealth dynamics is constrained by a lack of high-quality and comprehensive household-level panel data. This paper uses a pseudo-panel approach, tracking types of agents by birth cohort and across time through a series of cross-section snapshots synthesized with macro aggregates. The key micro source data is the Survey of Consumer Finances (SCF), which captures the top of the wealth distribution by sampling from administrative records. The SCF has the detailed balance sheet components, incomes, and interfamily transfers needed to use both sides of the intertemporal budget constraint and thus solve for saving and consumption. The results here are consistent with recent papers based on individual panel data from countries with administrative registries, and highlights the different roles of saving, capital gains, and interfamily transfers in wealth change over the lifecycle and across permanent income groups.
Keywords: Consumption, Household income, Lifecycle, Saving, Wealth
JEL Classification: H55, J32, D14
Suggested Citation: Suggested Citation