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

Economic Well-Being and Inequality: Papers from the Fifth ECINEQ Meeting

ISBN: 978-1-78350-567-8, eISBN: 978-1-78350-556-2

ISSN: 1049-2585

Publication date: 30 September 2014

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 United States, 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

Acknowledgements

Acknowledgments

This research is part of the WealthPort project (Household Wealth Portfolios in a Comparative Perspective) supported by the Luxembourg “Fonds National de la Recherche” (contract CORE C09/LM/04) and by core funding for CEPS/INSTEAD by the Ministry of Higher Education and Research of Luxembourg.

Citation

Doorley, K. and Sierminska, E. (2014), "Cross-National Differences in Wealth Portfolios at the Intensive Margin: Is there a Role for Policy?", Economic Well-Being and Inequality: Papers from the Fifth ECINEQ Meeting (Research on Economic Inequality, Vol. 22), Emerald Group Publishing Limited, pp. 43-85. https://doi.org/10.1108/S1049-258520140000022000

Download as .RIS

Publisher

:

Emerald Group Publishing Limited

Copyright © 2014 Emerald Group Publishing Limited

Please note you might not have access to this content

You may be able to access this content by login via Shibboleth, Open Athens or with your Emerald account.
If you would like to contact us about accessing this content, click the button and fill out the form.