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The Effects of Schooling on Wealth Accumulation Approaching Retirement

Bingley, Paul and Martinello, Alessandro LU (2017) In Working Papers 2017(9).
Abstract
Education and wealth are positively correlated for individuals approaching retirement, but the direction of the causal relationship is ambiguous in theory and has not been identified in practice. We combine administrative data on individual total wealth with a reform expanding access to lower secondary school in Denmark in the 1950s, finding that schooling increases pension annuity claims but reduces the non-pension wealth of men in their 50's. These effects grow stronger as normal retirement age approaches. Labour market mechanisms are key, with schooling increasing job mobility, reducing housing equity, increasing leverage, and improving occupational pension benefits.
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author
organization
publishing date
type
Working Paper
publication status
published
subject
keywords
education, wealth, labour market mechanisms, pensions, housing equity, portfolio composition, instrumental variable, D31, G11, I24, I26
in
Working Papers
volume
2017
issue
9
pages
33 pages
publisher
Department of Economics, Lund Universtiy
language
English
LU publication?
yes
id
a3496cb7-cdde-4fea-9748-677eaca02517
date added to LUP
2017-07-14 15:30:27
date last changed
2017-07-14 15:30:27
@misc{a3496cb7-cdde-4fea-9748-677eaca02517,
  abstract     = {Education and wealth are positively correlated for individuals approaching retirement, but the direction of the causal relationship is ambiguous in theory and has not been identified in practice. We combine administrative data on individual total wealth with a reform expanding access to lower secondary school in Denmark in the 1950s, finding that schooling increases pension annuity claims but reduces the non-pension wealth of men in their 50's. These effects grow stronger as normal retirement age approaches. Labour market mechanisms are key, with schooling increasing job mobility, reducing housing equity, increasing leverage, and improving occupational pension benefits.},
  author       = {Bingley, Paul and Martinello, Alessandro},
  keyword      = {education,wealth,labour market mechanisms,pensions,housing equity,portfolio composition,instrumental variable,D31,G11,I24,I26},
  language     = {eng},
  month        = {06},
  note         = {Working Paper},
  number       = {9},
  pages        = {33},
  publisher    = {Department of Economics, Lund Universtiy},
  series       = {Working Papers},
  title        = {The Effects of Schooling on Wealth Accumulation Approaching Retirement},
  volume       = {2017},
  year         = {2017},
}