Income and Wealth over the Life Cycle: Evidence from Panel Data.

In this paper the authors examine household wealth and income in the Netherlands using data from the Socio Economic Panel (SEP) in the period 1987-89. They provide an evaluation of the quality of the data and some simple statistics which describe the behavior of wealth, saving, and income over the life cycle. The authors find there is substantial heterogeneity in the behavior of households, and wealth holdings vary substantially even among the same age group. By exploiting the panel features of the SEP, they derive saving from first differencing wealth. The authors find that a sizeable fraction of households do not dissave when old and they find some evidence in favor of the bequest motive. Copyright 1997 by The International Association for Research in Income and Wealth.