Do the rich really save more? Evidence from lifetime earnings and retirement resources in England" (joint with Carl Emmerson and Gemma Tetlow)

| 12:30 - 13:45
Location: Institute for Fiscal Studies -

7 Ridgmount Street



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We use a unique dataset, containing individual survey data from the English Longitudinal Study of Ageing linked to administrative data on earnings histories, to construct measures of lifetime earnings and examine how these relate to resources in retirement. Income and wealth at retirement is, as a standard life cycle model of saving suggests, positively correlated with lifetime earnings but there is also substantial dispersion in retirement income and wealth among people with similar lifetime earnings. For example, we find that those with greater numerical ability and higher qualifications tend to have greater retirement resources even after controlling for lifetime earnings. We relate these findings to the long-standing question of whether higher-lifetime earners save a larger fraction of their lifetime income, discussing the confounding issues of inheritances and the endogeneity of lifetime earnings. We compare our results for England with previous work on the US Health and Retirement Study.