Private Wealth Over the Life Cycle: A Meeting Between Microsimulation and Structural Approaches

Lino Galiana and Lionel Wilner

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Abstract: This paper embeds a structural model of private wealth accumulation over the life cycle within a dynamic microsimulation model designed for long‐run projections of pensions. In such an environment, the optimal savings path results from consumption smoothing and bequests motives, on top of the mortality risk. Preferences are estimated based on a longitudinal wealth survey through a method of simulated moments. Simulations issued from these estimations replicate quite well a private wealth that is more concentrated than labor income. They enable us to compute "augmented" standards of living including capital income, hence to quantify both the countervailing role played by private wealth to earnings dropout after retirement and the impact of the mortality risk in this regard.

Keywords: Microsimulation; Intertemporal Consumer Choice; Life-cycle; Inequality; C63 C88 D15 Microsimulation Intertemporal Consumer Choice Life-cycle Inequality; C63; C88; D15 Microsimulation (search for similar items in EconPapers)
Date: 2024-05-28
New Economics Papers: this item is included in nep-age, nep-cmp and nep-dge
Note: View the original document on HAL open archive server: https://hal.science/hal-04799408v1
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Published in Review of Income and Wealth, 2024, ⟨10.1111/roiw.12697⟩

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Related works:
Journal Article: Private Wealth Over the Life Cycle: A Meeting Between Microsimulation and Structural Approaches (2025)
Working Paper: Private Wealth over the Life-Cycle: A Meeting between Microsimulation and Structural Approaches (2023)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-04799408

DOI: 10.1111/roiw.12697

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