This paper studies the quantitative importance of precautionary wealth accumulation relative to life-cycle saving for retirement. Section 1 examines panel data on earnings from the PSID. Using a bivariate normal model of random effects, we find that second-period-of-life earnings are strongly...

Data suggest the distribution of wealth among households in the United States and the United Kingdom has become more equal over the last century - though the pattern may have reversed recently. This paper shows that a model in which all households save for life-cycle reasons and some for...