Asset Holdings and the Life Cycle

Mervyn A. King, Louis Dicks-Mireaux

NBER Working Paper No. 614 (Also Reprint No. r0301)
Issued in 1981
NBER Program(s):Public Economics Program

Empirical studies of the life cycle savings model have tended to rej ect the hypothesis of a "hump-shaped" pattern for the wealth-age profile. In this paper we show, using new data on net worth for 12,734 families, that there is evidence that wealth declines after retirement provided that we control for differences in permanent income and take account of sample selection bias. The estimated rates of decumulation are consistent with a life cycle model in which there is uncertainty about the date of death.

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Document Object Identifier (DOI): 10.3386/w0614

Published: King, M. A. and Dicks-Mireaux, L-D. L. "Asset Holdings and the Life Cycle." Economic Journal, Vol. 92, No. 366 (June 1982), pp. 247-267.

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