Have IRAs Increased U.S. Saving?: Evidence from Consumer Expenditure Surveys / Steven F. Venti, David A. Wise.

Format:

Book

Author/Creator:

Venti, Steven F.

Contributor:

National Bureau of Economic Research.

Wise, David A.

Series:

Working Paper Series (National Bureau of Economic Research) no. w2217.

NBER working paper series no. w2217

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Have IRAs Increased U.S. Saving?

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 1987.

Summary:

The vast majority of Individual Retirement Account contributions represent net new saving, based on evidence from the quarterly Consumer Expenditure Surveys (CES). The results are based on analysis of the relationship between IRA contributions and other financial asset saving. The data show almost no substitution of IRAs for other saving. While the core of the paper is based on cross-section analysis, important use is made of the CES panel of independent cross-sections that span the period during which IRAs were introduced. Estimates for the post 1982 period, when IRAs were available to all employees, are based on a flexible constrained optimization model, with the IRA limit the principle constraint. The implications of this model for saving in the absence of the IRA option match very closely the actual non-IRA financial asset saving behavior prior to 1982. IRA saving does not show up as other financial asset saving in the pre-IRA period.

Notes:

Print version record

April 1987.