Pensions in the 2000s: the Lost Decade?

Wolff, Edward

Pensions in the 2000s: the Lost Decade?

No 16991, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: One of the most dramatic changes in the retirement income system over the last three decades has been a decline in traditional defined benefit (DB) pension plans and a corresponding rise in defined contribution (DC) pensions. Have workers benefited from this change? Using data from the Survey of Consumer Finances, I find that after robust gains in the 1980s and 1990s, pension wealth experienced a marked slowdown in growth from 2001 to 2007. Projections to 2009 indicate no increase in pension wealth from 2001 to 2009. Retirement wealth is also found to offset the inequality in standard household net worth. However, I find that pensions had a weaker offsetting effect on wealth inequality in 2007 than in 1989. As a result, whereas standard net worth inequality showed little change from 1989 to 2007, the inequality of private augmented wealth (the sum of pension wealth and net worth) did increase over this period. These results hold up even when Social Security wealth and employer contributions to DC plans are included in the measure of wealth and when adjustments are made for future tax liabilities on retirement wealth.

JEL-codes: D31 H55 J32 (search for similar items in EconPapers)
Date: 2011-04
New Economics Papers: this item is included in nep-age and nep-lab
Note: AG PR
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Citations: View citations in EconPapers (2)

Published as Edward N. Wolff, 2015. "U.S. Pensions in the 2000s: The Lost Decade?," Review of Income and Wealth, vol 61(4), pages 599-629.

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