Cross-National Differences in Wealth Portfolios at the Intensive Margin: Is There a Role for Policy?

Karina Doorley and Eva Sierminska

No 8306, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Using harmonized wealth data and a novel decomposition approach in this literature, we show that cohort effects exist in the income profiles of asset and debt portfolios for a sample of European countries, the U.S. and Canada. We find that the association between household wealth portfolios at the intensive margin (the level of assets) and household characteristics is different from that found at the extensive margin (the decision to own). Characteristics explain most of the cross-country differences in asset and debt levels, except for housing wealth, which displays large unexplained differences for both the under-50 and over-50 populations. However, there are cohort differences in the drivers of wealth levels. We observe that younger households' levels of wealth, given participation, may be more responsive to the institutional setting than mature households. Our findings have important implications, indicating a scope for policies which can promote or redirect investment in housing for both cohorts and which promote optimal portfolio allocation for mature households.

Keywords: institutions; decomposition; wealth portfolios; demographics (search for similar items in EconPapers)
JEL-codes: G11 G21 J10 (search for similar items in EconPapers)
Pages: 44 pages
Date: 2014-07
New Economics Papers: this item is included in nep-eur
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Citations: View citations in EconPapers (5)

Published - published in: Research on Economic Inequality, 2014, 22, 43-85

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Chapter: Cross-National Differences in Wealth Portfolios at the Intensive Margin: Is there a Role for Policy? (2014)
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