The Age-Wealth Profile and the Life-Cycle Hypothesis: A Cohort Analysis with a Time Series of Cross-Sections of Italian Households

Posted: 12 Sep 1999

See all articles by Tullio Jappelli

Tullio Jappelli

University of Naples Federico II - Department of Economics and Statistics; Centre for Economic Policy Research (CEPR); European Corporate Governance Institute (ECGI); Center for Studies in Economics and Finance - CSEF; CSEF - University of Naples Federico II - Centre for Studies in Economics and Finance (CSEF)

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Abstract

In this paper I estimate the age-wealth profile under two different identification assumptions about age, cohort and time effects. According to the life-cycle model, the two set of assumptions should yield similar age-wealth profiles. Using the 1984-1993 Italian Survey of Household Income and Wealth, the estimated average annual rate of wealth decumulation in old age is found to be between 3 and 6 percent. As in the life-cycle model, the cohort effect increases with year of birth. However, the results uncover also considerable population heterogeneity: the rates of wealth decumulation are much lower for rich households and households headed by individuals with higher education.

JEL Classification: E21

Suggested Citation

Jappelli, Tullio, The Age-Wealth Profile and the Life-Cycle Hypothesis: A Cohort Analysis with a Time Series of Cross-Sections of Italian Households. Review of Income and Wealth, March 1999, Available at SSRN: https://ssrn.com/abstract=173653

Tullio Jappelli (Contact Author)

University of Naples Federico II - Department of Economics and Statistics ( email )

Via Cintia - Monte S. Angelo
Napoli, 80126
Italy

HOME PAGE: http://www.csef.it/people/jappelli.htm

Centre for Economic Policy Research (CEPR)

London
United Kingdom

HOME PAGE: http://www.cepr.org/researchers/details/rschcontact.asp?IDENT=106354

European Corporate Governance Institute (ECGI)

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium

HOME PAGE: http://www.ecgi.org

Center for Studies in Economics and Finance - CSEF ( email )

Via Cintia - Monte S. Angelo
Napoli, 80126
Italy

HOME PAGE: http://www.csef.it/people/jappelli.htm

CSEF - University of Naples Federico II - Centre for Studies in Economics and Finance (CSEF) ( email )

Via Cintia
Complesso Monte S. Angelo
Naples, Naples 80126
Italy

HOME PAGE: http://www.csef.it/people/jappelli.htm

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