The Wealth Decumulation Behavior of the Retired Elderly in Italy: The Importance of Bequest Motives and Precautionary Saving

Luigi Ventura and Charles Horioka ()

No DP2020-16, Discussion Paper Series from Research Institute for Economics & Business Administration, Kobe University

Abstract: In this paper, we analyze the wealth accumulation and saving behavior of the retired elderly in Italy using micro data from the "Survey of Italian Households' Income and Wealth," a panel survey of households conducted every two years by the Bank of Italy. We find that, on average, the retired elderly in Italy are decumulating their wealth (dissaving) but that their wealth decumulation rates are much slower than expected. Moreover, we also find that more than 40 percent of the retired elderly in Italy are continuing to accumulate wealth and that more than 80 percent are doing positive amounts of saving. Thus, the Wealth Decumulation Puzzle (the tendency of the retired elderly to decumulate their wealth more slowly than expected) appears to apply in the case of Italy, as it does in most other countries, before as well as after the Global Financial Crisis. Moreover, our regression analysis of the determinants of the wealth accumulation and saving behavior of the retired elderly in Italy suggests that the lower than expected wealth decumulation rates and dissaving of the retired elderly in Italy is due largely to bequest motives and saving for precautionary purposes, especially the former.

Keywords: Aged; Bequests; Bequest intentions; Bequest motive; Elderly; Household saving; Italy; Inheritances; Intergenerational transfers; Life cycle hypothesis; Life cycle model; Precautionary saving; Retired elderly; Saving; Wealth; Wealth accumulation; Wealth decumulation; Wealth decumulation puzzle (search for similar items in EconPapers)
JEL-codes: D12 D14 D15 D64 E21 J14 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2020-04
New Economics Papers: this item is included in nep-age, nep-eur and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

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https://www.rieb.kobe-u.ac.jp/academic/ra/dp/English/DP2020-16.pdf First version, 2020 (application/pdf)

Related works:
Journal Article: The wealth decumulation behavior of the retired elderly in Italy: the importance of bequest motives and precautionary saving (2020)
Working Paper: The Wealth Decumulation Behavior of the Retired Elderly in Italy: The Importance of Bequest Motives and Precautionary Saving (2020)
Working Paper: The Wealth Decumulation Behavior of the Retired Elderly in Italy: The Importance of Bequest Motives and Precautionary Saving (2020)
Working Paper: The Wealth Decumulation Behavior of the Retired Elderly in Italy: The Importance of Bequest Motives and Precautionary Saving (2020)
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