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Older or wealthier?: the impact of age adjustment on cross-sectional inequality measures

Almås, Ingvild; Mogstad, Magne
Working paper
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URI
http://hdl.handle.net/11250/163210
Date
2010-03
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  • Discussion papers (SAM) [581]
Abstract
Differences in individual wealth holdings are widely viewed as a driving force of

economic inequality. However, as this finding relies on cross-section data, a concern

is that one confuses older with wealthier. We propose a new method to adjust for age

effects in cross-sections, which eliminates wealth inequality due to age, yet preserves

inequality arising from other factors. Using a new cross-country comparable database,

we examine the impact of age adjustments on wealth inequality across countries and

over time. We find that the most widely used method yield a substantially different

picture of age adjusted wealth inequality than our method.
Publisher
Norwegian School of Economics and Business Administration. Department of Economics
Series
Discussion paper
2010:9

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