Does Demography Change Wealth Inequality?

Miguel Sánchez-Romero, Stefan Wrzaczek (), Alexia Fürnkranz-Prskawetz and Gustav Feichtinger
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Stefan Wrzaczek: Vienna Institute of Demography/Austrian Academy of Sciences

A chapter in Control Systems and Mathematical Methods in Economics, 2018, pp 349-375 from Springer

Abstract: Abstract In this article, we investigate the effect of demography on wealth inequality. We propose an economic growth model with overlapping generations in which individuals are altruistic towards their children and differ with respect to the age of their parent. We denote the age gap between the parent and their child as generational gap. The introduction of the generational gap allows us to analyze wealth inequality not only across cohorts but also within cohorts. Our model predicts that a decline in fertility raises wealth inequality within cohorts and, simultaneously, it reduces inequality at the population level (across cohorts). In contrast, increases in life expectancy result in a non-monotonic effect on wealth inequality by age and across cohorts.

Keywords: Wealth Inequality; Gene Disruption; Average Financial Wealth; Retirement Motive; Representative Agent Approach (search for similar items in EconPapers)
Date: 2018
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Persistent link: https://EconPapers.repec.org/RePEc:spr:lnechp:978-3-319-75169-6_17

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DOI: 10.1007/978-3-319-75169-6_17

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