Cormac O'Dea is a Postdoctoral Associate at the Cowles Foundation at Yale University. He will be an Assistant Professor at the Yale University Economics Department from July 2018. Cormac previously worked at the IFS from 2007 to 2017, and was an Associate Director from 2016 to 2017.
Do the rich save more? Evidence from linked survey and administrative data
| Journal Articles
The nature of the relationship between lifetime income and saving rates is a longstanding empirical question and one that has been surprisingly difficult to answer. We use a new data set containing both individual survey data on wealth holdings and administrative data on earnings histories to examine this question. We find, for a sample of English households, evidence of a positive relationship between the rate of private wealth accumulation and levels of lifetime earnings. Even when state pension wealth is included, the top quintile of lifetime earnings have significantly higher wealth to lifetime earnings ratios than the other quintiles. Under this broad measure of wealth, those in the middle of the distribution of lifetime earnings accumulate the least wealth relative to their earnings.