U.S. Pensions in the 2000s

The Lost Decade?

Edward Wolff

    Research output: Contribution to journalArticle

    Abstract

    The last three decades saw a sharp decline in traditional defined benefit (DB) pensions and a corresponding rise in defined contribution (DC) plans. Using the Survey of Consumer Finances from 1983 to 2010, I find that after robust gains in the 1980s and 1990s, pension wealth experienced a marked slowdown in growth from 2001 to 2007 and then fell in absolute terms from 2007 to 2010. Median augmented wealth (the sum of net worth, pensions, and Social Security wealth) advanced slower than median net worth from 1983 to 2007 and its inequality rose more, as DB wealth fell off. However, from 2007 to 2010, the opposite occurred. While median wealth plummeted by 41 percent and inequality spiked by 0.032 Gini points, median augmented wealth fell by only 21 percent and its Gini coefficient rose by only 0.009 points. The differences are due to the moderating influence of Social Security wealth.

    Original languageEnglish (US)
    Pages (from-to)599-629
    Number of pages31
    JournalReview of Income and Wealth
    Volume61
    Issue number4
    DOIs
    StatePublished - Dec 1 2015

    Fingerprint

    Wealth
    Pensions
    Median
    Social security
    Net worth
    Defined benefit
    Gini
    Consumer finance
    Gini coefficient
    Defined contribution plan

    Keywords

    • Inequality
    • Pensions
    • Social Security
    • Wealth

    ASJC Scopus subject areas

    • Economics and Econometrics

    Cite this

    U.S. Pensions in the 2000s : The Lost Decade? / Wolff, Edward.

    In: Review of Income and Wealth, Vol. 61, No. 4, 01.12.2015, p. 599-629.

    Research output: Contribution to journalArticle

    Wolff, Edward. / U.S. Pensions in the 2000s : The Lost Decade?. In: Review of Income and Wealth. 2015 ; Vol. 61, No. 4. pp. 599-629.
    @article{d6c48506dcd848e2a19c1e2118888405,
    title = "U.S. Pensions in the 2000s: The Lost Decade?",
    abstract = "The last three decades saw a sharp decline in traditional defined benefit (DB) pensions and a corresponding rise in defined contribution (DC) plans. Using the Survey of Consumer Finances from 1983 to 2010, I find that after robust gains in the 1980s and 1990s, pension wealth experienced a marked slowdown in growth from 2001 to 2007 and then fell in absolute terms from 2007 to 2010. Median augmented wealth (the sum of net worth, pensions, and Social Security wealth) advanced slower than median net worth from 1983 to 2007 and its inequality rose more, as DB wealth fell off. However, from 2007 to 2010, the opposite occurred. While median wealth plummeted by 41 percent and inequality spiked by 0.032 Gini points, median augmented wealth fell by only 21 percent and its Gini coefficient rose by only 0.009 points. The differences are due to the moderating influence of Social Security wealth.",
    keywords = "Inequality, Pensions, Social Security, Wealth",
    author = "Edward Wolff",
    year = "2015",
    month = "12",
    day = "1",
    doi = "10.1111/roiw.12123",
    language = "English (US)",
    volume = "61",
    pages = "599--629",
    journal = "Review of Income and Wealth",
    issn = "0034-6586",
    publisher = "Wiley-Blackwell",
    number = "4",

    }

    TY - JOUR

    T1 - U.S. Pensions in the 2000s

    T2 - The Lost Decade?

    AU - Wolff, Edward

    PY - 2015/12/1

    Y1 - 2015/12/1

    N2 - The last three decades saw a sharp decline in traditional defined benefit (DB) pensions and a corresponding rise in defined contribution (DC) plans. Using the Survey of Consumer Finances from 1983 to 2010, I find that after robust gains in the 1980s and 1990s, pension wealth experienced a marked slowdown in growth from 2001 to 2007 and then fell in absolute terms from 2007 to 2010. Median augmented wealth (the sum of net worth, pensions, and Social Security wealth) advanced slower than median net worth from 1983 to 2007 and its inequality rose more, as DB wealth fell off. However, from 2007 to 2010, the opposite occurred. While median wealth plummeted by 41 percent and inequality spiked by 0.032 Gini points, median augmented wealth fell by only 21 percent and its Gini coefficient rose by only 0.009 points. The differences are due to the moderating influence of Social Security wealth.

    AB - The last three decades saw a sharp decline in traditional defined benefit (DB) pensions and a corresponding rise in defined contribution (DC) plans. Using the Survey of Consumer Finances from 1983 to 2010, I find that after robust gains in the 1980s and 1990s, pension wealth experienced a marked slowdown in growth from 2001 to 2007 and then fell in absolute terms from 2007 to 2010. Median augmented wealth (the sum of net worth, pensions, and Social Security wealth) advanced slower than median net worth from 1983 to 2007 and its inequality rose more, as DB wealth fell off. However, from 2007 to 2010, the opposite occurred. While median wealth plummeted by 41 percent and inequality spiked by 0.032 Gini points, median augmented wealth fell by only 21 percent and its Gini coefficient rose by only 0.009 points. The differences are due to the moderating influence of Social Security wealth.

    KW - Inequality

    KW - Pensions

    KW - Social Security

    KW - Wealth

    UR - http://www.scopus.com/inward/record.url?scp=84958743691&partnerID=8YFLogxK

    UR - http://www.scopus.com/inward/citedby.url?scp=84958743691&partnerID=8YFLogxK

    U2 - 10.1111/roiw.12123

    DO - 10.1111/roiw.12123

    M3 - Article

    VL - 61

    SP - 599

    EP - 629

    JO - Review of Income and Wealth

    JF - Review of Income and Wealth

    SN - 0034-6586

    IS - 4

    ER -