The Transformation of the American Pension System

Title page

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Copyright page

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Contents

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pp. v-vi

Preface

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pp. xiii-

My work on retirement wealth and retirement adequacy was originally stimulated by two articles by Martin Feldstein (1974, 1976), which introduced the concept of Social Security wealth and developed its methodology, and considered the effects of Social Security wealth on the overall distribution of wealth. The latter paper was based on the 1962 Survey of Financial Characteristics of Consumers. My work...

1 Introduction

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pp. 1-10

The last three decades have witnessed the radical transformation of the American pension system. In Wolff (2003), I call attention to this change which had been occurring since the early 1980s. I report that the share of households in the age group 47–64 with a defined contribution (DC) pension plan soared from 12 percent in 1983 to 60 percent in 1998, while the share with a defi ned benefi t (DB) plan...

2 Recent Trends in Household Wealth, 1983-2009: Robust Growth Followed by Collapse

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pp. 11-48

It is useful to begin the empirical part of the book with a presentation of wealth trends based on the standard definition of wealth. This will serve as a backdrop for the rest of the book. In particular, we will see how our basic findings on wealth trends change when we include retirement wealth in the defi nition of household wealth. Moreover, we will be able to see some of the reasons for the...

3 Review of the Literature on Retirement Wealth and Retirement Adequacy

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pp. 49-80

We now turn our attention to the main topic of the book: retirement wealth and retirement adequacy. Before showing my own results on the subject, it is helpful to see what previous research has found. This review of the previous literature on these topics will provide a context for my later empirical findings. I divide the survey into six...

4 The Slowdown in Pension Wealth Growth in the 2000s

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pp. 81-130

As I discuss in Chapter 1, one of the most dramatic changes in the retirement income system over the last three decades has been the replacement of many traditional DB pension plans with DC pensions. Has this transformation been beneficial to most American households? This is the principal focus of the chapter. Poterba, Venti, and Wise (1998) find that the transition from DB...

5 Stagnation of Retirement Wealth in the 2000s

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pp. 131-170

One of the main topics to be addressed in this book is retirement adequacy. A full picture of retirement resources would not be complete without a consideration of expected Social Security benefits and Social Security wealth (SSW). This chapter fills in that gap. We pick up the story from Chapter 4 by focusing on SSW, retirement wealth in general, and augmented...

6 Differences in Retirement Wealth by Demographic and Household Characteristics

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pp. 171-210

How have different demographic groups fared with the transition in the structure of the pension system? We saw an inkling of this in Chapter 4 when we examined changes in pension coverage for different groups of workers. We find that female workers actually fared very well, while men saw their pension coverage...

7 Retirement Prospects

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pp. 211-254

Retirement income security occupies the public debate on a regular basis. It refers to the ability of households to provide an adequate stream of income during the period of their retirement from the labor force. There has been, for example, periodic discussion about the possibility for Social Security privatization. What...

Ch 8 - Conclusions and Policy Recommendations

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pp. 255-272

The 1980s and 1990s witnessed the unraveling of the traditional DB pension system in favor of DC pension coverage. The study in this book addresses three key questions. First, have U.S. households in general gained from this transformation? Second, if not, which groups gained and which groups lost out? Third, has the transformation of the pension system lowered or raised overall...

Appendix A: Sources and Methods Used for the Survey of Consumer Finances Data

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pp. 273-276

Appendix B: Estimation of Pension and Social Security Wealth

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pp. 277-292

Appendix C: Augmented Wealth Including Employer Contributions to DC Plans and Net of Taxes

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pp. 293-294

Appendix D: Extended Results on Retirement Adequacy

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pp. 295-310

References

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pp. 311-320

Author

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pp. 321-322

Edward N. Wolff received his PhD from Yale University in 1974 and is professor of economics at New York University, where he has taught since 1974, and a senior scholar at the Levy Economics Institute of Bard College. He is also a research associate at the National Bureau of Economic Research and has been a council member of the International Association for Research in Income and Wealth since 1987. Dr. Wolff...

Index

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pp. 323-332

About the Institute

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pp. 333-

The W.E. Upjohn Institute for Employment Research is a nonprofit research organization devoted to finding and promoting solutions to employment related problems at the national, state, and local levels. It is an activity of the W.E. Upjohn Unemployment Trustee Corporation, which was established in 1932 to administer a fund set aside by Dr. W.E. Upjohn, founder of The Upjohn Company, to seek ways to counteract the loss of employment income during economic downturns. The Institute is funded largely...