@article {11391, title = {Wealth Trajectories Across Key Milestones: Longitudinal Evidence from Life-Course Transitions}, number = {28329}, year = {2021}, institution = {National Bureau of Economic Research}, address = {Cambridge, MA}, abstract = {Wealth varies considerably across the population and changes significantly over the lifecycle. In this paper, we trace out trajectories of wealth across several key life milestones, including marriage, homeownership, childbirth, divorce, disability, health shocks, retirement and widowhood using multiple decades of longitudinal panel data. We estimate both changes over the ten-year period before and after each milestone and assess whether those changes occur gradually or sharply after the milestone. We find evidence of significant long-run increases in wealth associated with homeownership and retirement, and significant long-run reductions in wealth associated with divorce, health shocks, and disability. In general, these changes appear to occur gradually rather than immediately after the milestone. Our results also indicate a large degree of heterogeneity across demographics, socioeconomic status and risk protection from insurance. In particular, those with lower levels of socioeconomic status and those without access to risk protection experience smaller wealth gains (or larger wealth losses) following life-course transitions. These results identify populations and life stages where individuals are most vulnerable to large reductions in wealth.}, keywords = {Disability, Divorce, Health Shocks, Homeownership, Marriage, Retirement, wealth trajectory, Widowhood}, doi = {10.3386/w28329}, author = {Gopi Shah Goda and Streeter, Jialu L.} } @article {10446, title = {PATTERNS OF WEALTH TRAJECTORY IN LATER LIFE: CRITICAL PERIOD, ACCUMULATION, AND SOCIAL MOBILITY MODELS}, journal = {Innovation in Aging}, volume = {3}, year = {2019}, month = {2019/11/08}, pages = {S382 - S382}, abstract = {Wealth, an important financial cushion for older adults to buffer economic stress, requires a longer time to accumulate and develop in one{\textquoteright}s course of life. However, little is known about the trajectories of wealth in later life, and how the life course socioeconomic status (SES) may contribute to the development of wealth at old-age. This study investigated longitudinal patterns of wealth trajectory and whether SES across the life course affects these trajectories using critical period, accumulation, and social mobility models. Using data from 16,189 adults aged 51 and older from the 2004-2014 Health and Retirement Study, a growth mixture model was used to explore distinct wealth trajectories. Impacts of life course models were studied using multinomial logistic regression. Results showed that four heterogeneous latent classes of wealth were identified: Stable high (reference group), Low and increasing, Stable low, and High but decline. Disadvantaged adulthood SES, accumulated exposure to socioeconomic risks, and downward or persistent socioeconomic disadvantage over the life course were associated with Stable low, Low and increasing, and High but decline, supporting all three life course mechanisms on wealth development in later life. Evidence suggests that wealth development is heterogeneous across individuals, and a strong gradient effect of life-course SES on wealth trajectories are clearly observed. Programs and policies should address the effects of life course on wealth development to strengthen the economic well-being in later life.}, keywords = {modeling, social mobility, Wealth, wealth trajectory}, isbn = {2399-5300}, url = {https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6840301/}, author = {Chen, Yu-Chih and So Jung Park and Morrow-Howell, Nancy} }