Evaluating Pension Portability Reforms: The Tax Reform Act of 1986 as a Natural Experiment

This paper uses the Tax Reform Act of 1986 as a natural experiment to evaluate the job mobility response of prime-aged US employees participating in employer sponsored defined benefit pension plans to a reduction in the vesting period for pension rights accrual. We apply difference-in-differences methods using data from the Survey of Income and Program Participation to estimate the treatment impact of this policy change. We find that on average the reform had no significant effects on voluntary job mobility of the treated group. Our findings are robust to the use of different control groups and difference-in-differences estimators.Labour mobility, employer-provided pension plans, vesting, program evaluation, propensity score matching

The Wealth of Mexican Americans

This paper analyzes the sources of disparities in the relative wealth position of Mexican Americans. Results reveal that wealth gaps are in large part not the result of differences in conditional expected wealth functions. Similarly, income differentials are important, but do not play the primary role in explaining the gap in median net worth. As much or more of Mexican Americans' wealth disadvantage is attributable to the fact that these families have more young children and heads who are younger. Furthermore, Mexican Americans' low educational attainment has a direct effect in producing a wealth gap relative to other ethnic groups (even after differences in income are taken into account) though education does not significantly affect the nativity wealth gap. Finally, geographic concentration is generally unimportant, but does contribute to narrowing the wealth gap between wealthy Mexican Americans and their white and black counterparts.wealth; Mexican American

Portfolio Allocation in the Face of a Means-Tested Public Pension

Is there evidence that households adjust their asset portfolios just prior to retirement in response to a means-tested public pension? We address this question by estimating a system of asset equations constrained to add up to net worth. We find little evidence that in 2006 healthy households or couples responded to the incentives embedded in the means test determining pension eligibility by reallocating their assets. While there are some significant differences in asset portfolios associated with being near the income threshold, being of pensionable age, and being in poor health these differences are often only marginally significant, are not robust across time, and are not clearly consistent with the incentives inherent in the pension eligibility rules. In 2006, any behavioral response to the means test seems to occur among single pensioners in poor health. Comparison with 2002 results suggests the incentives to reallocate assets may have weakened over time.asset portfolios; means testing; public pension; household wealth

The Portfolio Choices of Hispanic Couples

This paper analyzes the portfolio allocations of couple-headed, Hispanic families using Survey of Income and Program Participation (SIPP) data. Our results reveal that Hispanic couples as a group are less wealthy than otherwise similar white couples, although there is substantial variation across Hispanic-origin groups. Much of the disparity in portfolio choices of Hispanic relative to whites appears to stem from these lower wealth levels. Accounting for these wealth disparities, Hispanic couples hold less financial wealth, but more real estate and business equity than do white couples.portfolio choices; Hispanic

Portfolio Allocation in the Face of a Means-Tested Public Pension

Is there evidence that households adjust their asset portfolios just prior to retirement in response to a means-tested public pension? We address this question by estimating a system of asset equations constrained to add up to net worth. We find little evidence that in 2006 healthy households or couples responded to the incentives embedded in the means test determining pension eligibility by reallocating their assets. While there are some significant differences in asset portfolios associated with being near the income threshold, being of pensionable age, and being in poor health these differences are often only marginally significant, are not robust across time, and are not clearly consistent with the incentives inherent in the pension eligibility rules. In 2006, any behavioral response to the means test seems to occur among single pensioners in poor health. Comparison with 2002 results suggests the incentives to reallocate assets may have weakened over time.asset portfolios, means testing, public pension, household wealth

The Asset Portfolios of Native-born and Foreign-born Households

This paper analyses the net worth and asset portfolios of native- and foreign-born Australian families using HILDA (wave 2) data. Specifically, we estimate a system of asset equations with an adding-up constraint imposed to control for variation in households’ total net worth. Our results indicate that after accounting for differences in human capital and income levels, single immigrants have a wealth advantage of almost $185,000 relative to single native-born individuals. Although the wealth gap between mixed and native-born couples is not statistically significant, immigrant-only couples have approximately$150,000 less wealth on average than native-born couples. Relative to equally wealthy native-born couples, immigrant-only couples hold substantially more of their wealth in their homes and less in the form of vehicles and financial assets. mixed couples, on the other hand, allocate their wealth across assets in the same way as nativeborn couples.Wealth, immigrants, housing

The Asset Portfolios of Native-Born and Foreign-Born Households

This paper analyses the net worth and asset portfolios of native- and foreign-born Australian families using HILDA (wave 2) data. Specifically, we estimate a system of asset equations with an adding-up constraint imposed to control for variation in households’ total net worth. Our results indicate that after accounting for differences in human capital and income levels, single immigrants have a wealth advantage of almost $185,000 relative to single native-born individuals. Although the wealth gap between mixed and native-born couples is not statistically significant, immigrant-only couples have approximately$150,000 less wealth on average than native-born couples. Relative to equally wealthy native-born couples, immigrant-only couples hold substantially more of their wealth in their homes and less in the form of vehicles and financial assets. Mixed couples, on the other hand, allocate their wealth across assets in the same way as native-born couples.wealth, immigrants, housing

The Wealth and Asset Holdings of U.S.- Born and Foreign-Born Households: Evidence from SIPP Data

SIPP data are used to analyze the wealth of the U.S. foreign-born population. We find that the median wealth level of U.S.-born couples is 2.3 times the median of foreign-born couples, while the median wealth level of U.S.-born singles is three times that of foreign-born singles. Further, there is a great deal of diversity in wealth within the immigrant population. Diversity in net worth manifests itself primarily in source-region differences, while entry-cohort is more closely related to portfolio choices. Established immigrants hold less and recent immigrants hold more financial wealth. An opposite pattern emerges with respect to real estate equity

The Wealth of Mexican Americans

This paper analyzes the sources of disparities in the relative wealth position of Mexican Americans. Results reveal that wealth gaps are in large part not the result of differences in conditional expected wealth functions. Similarly, income differentials are important, but do not play the primary role in explaining the gap in median net worth. As much or more of Mexican Americans? wealth disadvantage is attributable to the fact that these families have more young children and heads who are younger. Furthermore, Mexican Americans? low educational attainment has a direct effect in producing a wealth gap relative to other ethnic groups (even after differences in income are taken into account) though education does not significantly affect the nativity wealth gap. Finally, geographic concentration is generally unimportant, but does contribute to narrowing the wealth gap between wealthy Mexican Americans and their white and black counterparts

A Comparative Analysis of the Nativity Wealth Gap

This paper investigates the source of the gap in the relative wealth position of immigrant households residing in Australia, Germany and the United States. Our results indicate that in German and the United States wealth differentials are largely the result of disparity in the educational attainment and demographic composition of the native and immigrant populations, while income differentials are relatively unimportant in understanding the nativity wealth gap. In contrast, the relatively small wealth gap between Australian and foreign-born households, exists because immigrants to Australia do not translate their relative educational and demographic advantage into a wealth advantage. On balance, our results point to substantial cross-nationality disparity in the economic well-being of immigrant and native families, which is largely consistent with domestic labor markets and the selection policies used to shape the nature of immigration flow.International migration, wealth accumulation