Understanding the trends in income, consumption and wealth inequality and how important are life-cycle effects?

Sommer, Mathias

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URL:	https://ub-madoc.bib.uni-mannheim.de/2057
URN:	urn:nbn:de:bsz:180-madoc-20577
Dokumenttyp:	Arbeitspapier
Erscheinungsjahr:	2008
Titel einer Zeitschrift oder einer Reihe:	MEA Discussion Papers
Band/Volume:	160
Ort der Veröffentlichung:	Mannheim
Sprache der Veröffentlichung:	Englisch
Einrichtung:	Fakultät für Rechtswissenschaft und Volkswirtschaftslehre > Sonstige - Fakultät für Rechtswissenschaft und Volkswirtschaftslehre
MADOC-Schriftenreihe:	Veröffentlichungen des MEA (Mannheim Research Institute For the Economics of Aging) > MEA Discussion Papers
Fachgebiet:	330 Wirtschaft
Normierte Schlagwörter (SWD):	Lebensstandard , Einkommensdisparität , Portfolio Selection , Einkommens- und Verbrauchsstichprobe , Deutschland
Freie Schlagwörter (Englisch):	inequality , income , consumption , wealth , savings , portfolio choice , bequests
Abstract:	Rising inequality in income, wealth and consumption has received a good deal of public attention in the past years. At the same time, also macroeconomists are more and more interested in inequality as they have expanded their models to incorporate heterogeneity in the household sector. We supply these models with empirical benchmarks for their calibration and contribute to the understanding of the reasons underlying the trends in inequality. Specifically, we employ a variance decomposition and estimate life-cycle profiles of inequality in income, consumption and wealth based on two measures of inequality. We deepen the discussion on wealth inequality by evaluating the relative importance of savings, portfolio choice and inheritances for the accumulation of wealth. To do so, we project active and passive savings based on the observed saving and investment behavior of synthetic cohorts from the German Income and Expenditure Survey (EVS).