Suchergebnisse

It is well known that an uncertain income stream will induce individuals to save if they are forward‐looking. In this paper we investigate the consequences of such saving on the distribution of wealth among households. The inquiry is motivated by the fact that both the dispersion of the US wealth distribution and the variance of transitory income have increased in the recent past. Surprisingly, we find that an increase in earnings uncertainty is more likely to decrease than increase the inequality in wealth holdings.