Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/230787 
Authors: 
Year of Publication: 
2019
Series/Report no.: 
IRTG 1792 Discussion Paper No. 2019-011
Publisher: 
Humboldt-Universität zu Berlin, International Research Training Group 1792 "High Dimensional Nonstationary Time Series", Berlin
Abstract: 
In this paper, we develop an multi period overlapping generation framework to investigate agents' consumption and saving decisions, inequality and welfare among elderly. We assume that agents are heterogeneous in the non-asset income and the medical expenditure. In order to explicitly analyze the e ects of medical expenditure, we conduct three counterfactual exercises. We successively shut down the heterogeneity in labor income, in the level and in the dispersion of medical expenses respectively. By comparing the benchmark with the counterfactual results, we nd that in general wealth inequality decreases with age, and income uncertainty contributes the most to wealth inequality. Both average consumption and consumption inequality increase with age. Consumption inequality largely tracks income inequality. Though uncertainty in medical expenditures has little e ect on consumption inequality, a higher level of medical expenditures may exacerbate consumption inequality. Meanwhile, the average saving of elderly exhibits an inverse-U shape with age. The impacts on average saving are similar both in benchmark and in counterfactual exercises. Welfare increases with age.
Subjects: 
Income Inequality
Social Mobility
Price-to-rent ratio
JEL: 
C00
Document Type: 
Working Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.