Were Small–Town New Yorkers Life–Cycle Savers?

Theories of household saving, including the life cycle hypothesis, posit that households add or draw down wealth to equalize the value of consumption over time. This article examines the extent to which late–nineteenth–century, small–town Americans accumulated financial assets consistent with the life cycle hypothesis. Using individual account records from a small–town savings banks, I find that savers accumulated an average of one year’s income at age sixty. Decumulation was slower than expected after age sixty. The evidence is inconsistent with a strong bequest motive, so the slow drawing down of wealth in old age may have been due to uncertain mortality risk or wealth–based attrition from the sample. I find differences in the life cycle accumulations between men and women, the native– and foreign–born, and low–skill and high–skill workers.