Longitudinal Determinants of End-of-Life Wealth Inequality

James Poterba, Steven Venti and David Wise ()

No 23839, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Inequality in wealth among elderly households, and in particular the prevalence of very low wealth holdings, can be an important consideration in the design of social insurance programs. This paper examines the incidence and determinants of low levels of financial and total wealth using repeated cross-sections of the Health and Retirement Study (HRS) and a small longitudinal sample of HRS respondents observed both at age 65 and shortly before death. Most of those who report very low wealth holdings at the end of their life had little wealth at the traditional retirement age of 65. There is strong persistence over time in reports of very low wealth, and more generally relatively little evidence that wealth is drawn down in the first 15 years of retirement. The age-specific probability of reporting low wealth increases slowly after age 65. Low lifetime earnings are strongly predictive of low wealth at retirement and at the end of life. The post-retirement onset of a major medical condition, and, for married women, the loss of their spouse, are both associated with small increases in the probability of reporting very low wealth, but they account for a small fraction of low-wealth outcomes. Low levels of wealth accumulation before age 65, rather than gaps in the safety net after 65 or rapid spend-down of accumulated assets, appear to be the primary determinant of low levels of wealth just before death.

JEL-codes: E21 H55 J14 (search for similar items in EconPapers)
Date: 2017-09
New Economics Papers: this item is included in nep-age, nep-lab, nep-ltv, nep-mac and nep-pbe
Note: AG EH PE
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Published as James Poterba & Steven Venti & David A. Wise, 2018. "Longitudinal determinants of end-of-life wealth inequality," Journal of Public Economics, .

Downloads: (external link)
http://www.nber.org/papers/w23839.pdf (application/pdf)

Related works:
Journal Article: Longitudinal determinants of end-of-life wealth inequality (2018)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:23839

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w23839

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().