New Directions in Household Saving
Friday, Jan. 3, 2020 8:00 AM - 10:00 AM (PDT)
- Chair: Kathleen McGarry, University of California-Los Angeles
Lifecycle Patterns of Saving and Wealth Accumulation
AbstractEmpirical 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.
Saving Behavior of Millennials
AbstractWe consider prospects for retirement saving for members of the millennial generation, who will be between ages 54 and 69 in 2050. Adequacy of retirement saving preparation among current and near-retirees is marked by significant heterogeneity, a characteristic that will likely hold for Millennials as well. In preparing for retirement, Millennials will have several advantages relative to previous generations, such as more education, longer working lives, and more flexible work arrangements, but also several disadvantages, including having to take more responsibility for their own retirement plans and marrying and bearing children at later ages. The millennial generation contains a significantly higher percentage of minorities than previous generations. We find that minority households have tended to accumulate less wealth than whites in the past, even after controlling for income, education, and marital status, and the difference appears to be growing over time for black households relative to whites. Whether these trends persist is central to understanding how the Millennials will fare in retirement.
- D1 - Household Behavior and Family Economics
- J3 - Wages, Compensation, and Labor Costs