La detention d'actifs risques selon l'age: Une etude econometrique / Aging and the Demand for Risky Assets: An Econometric Study

The age structure of the French population has been experiencing dramatic changes over the past decades and is likely to do so in a near future. The increasing proportion of elder people may modify the savings behavior of French households. The level of savings, as well as its composition, may be altered by the aging of the French population. This paper analyses the influence of age on the composition of wealth. In fact, there is a widespread opinion that the shorter the lifetime horizon, the thinner the share of risky assets in the total wealth should be. Yet this assertion relies on a misinterpretation of the Law of Large Numbers. Moreover, it may be argued that elder individuals, as far as they no longer face risks on the labour market, may take risks on the financial market. After a short review of the theoretical arguments in favour of an increasing holding of risky assets with age, we test the relevance of these arguments on French survey data (1998) using Probit and Logit regressions. We show that elder households are more likely to hold risky assets than younger ones, and that the share of risky assets is increasing with age. On the contrary the youngest households, presumably because they face more background risks, have a smaller part of their wealth in risky assets.