Cross National Comparison of Income and Wealth Status in Retirement: First Results From the Luxembourg Wealth Study (LWS)
In this paper, we assess the role of income and wealth in comparing economic security of older persons in the United States in cross-national perspective. We compare our elders to those in six other rich OECD countries (Canada, Finland, Germany, Italy, Sweden, and the United Kingdom). These countries have diverse social policy systems, with respect to both social insurance and public assistance; and they have very different patterns of private wealth holding. The paper is based on a new source of wealth micro data, known as the Luxembourg Wealth Study (LWS). In this paper, we first develop a comparable definition of wealth and net worth across nations and then focus our efforts on the inter-country variation in the composition of income and asset packages for those 65 and over, with respect to the main sources in each package. We examine the structure of income and wealth holdings and their joint distribution; how the poor fare; how assets vary by education; and the importance of home owning to elders in almost every nation. We conclude by comparing the risks associated with private assets to those associated with under-funded public pension systems.