Economists' principal tool for studying household behavioral responses to changes in tax and other government policies, and the magnitude and determinants of private saving, is the life-cycle model. The purpose of this paper is to attempt to incorporate into that model one of the most...

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...

Economists' most basic model for studying Social Security policy issues is the so - called life - cycle model of saving behavior. This paper sets up a life - cycle model in which a household simultaneously chooses its lifetime consumption profile and retirement age. The paper calibrates...

This paper formulates an overlapping generations model with both life-cycle saving and altruistic bequests. For a given distribution of earning abilities, the model generates a stationary steady-state capital-to-labor ratio for the economy as a whole and a stationary distribution of net worth...

This paper examines the role of bequests and inter vivos gifts in the U.S. economy, considering their importance in determining (i) the economy's aggregate capital stock, (ii) the distribution of private net worth, and (iii) public policy outcomes and options. It focuses on several recent...

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...

This paper studies the long-run implications for national wealth accumulation of potential changes in the U.S. social security system or in the size of the U.S. national debt. Privatization of a portion of the existing (unfunded) U.S. social security system would, if the national debt were held...

After dropping for a century, the average retirement age for U.S. males seems to have leveled off in recent decades. An important question is whether as future improvements in technology cause wages to rise, desired retirement ages will resume their downward trend, or not. This paper attempts to...

This study seeks to quantify determinants, and costs, of the labor-force participation of married women. We use demographic and earnings data from the Health and Retirement Study. The earnings data constitute an unusually long panel but have the defect of lacking corresponding reports on work...

Economists’ standard model assumes that improvements in total factor productivity (TFP) raise the marginal product of labor for all workers evenly. This paper uses an earnings dynamics regression model to study whether, in practice, older workers benefit less from TFP growth than younger...