ISSN (Print) 0473-453X

Discussion Paper No. 1087

ISSN (Online) 2435-0982

THE WEALTH DECUMULATION BEHAVIOR
OF THE RETIRED ELDERLY IN ITALY:
THE IMPORTANCE OF BEQUEST MOTIVESAND PRECAUTIONARY SAVING

Luigi VenturaCharles Yuji Horioka

April 2020

The Institute of Social and Economic Research
Osaka University
6-1 Mihogaoka, Ibaraki, Osaka 567-0047, Japan

The Wealth Decumulation Behavior of the Retired Elderly in Italy:
The Importance of Bequest Motives and Precautionary Saving
Luigi Ventura(Sapienza, University of Rome)Charles Yuji Horioka(Research Institute for Economics and Business Administration, Kobe University;
Institute of Social and Economic Research, Osaka University; Asian Growth ResearchInstitute; and National Bureau of Economic Research)
April 2020
Abstract: In this paper, we analyze the wealth accumulation and saving behavior of theretired elderly in Italy using micro data from the “Survey of Italian Households’ Income
and Wealth,” a panel survey of households conducted every two years by the Bank of
Italy. We find that, on average, the retired elderly in Italy are decumulating their wealth(dissaving) but that their wealth decumulation rates are much slower than expected.
Moreover, we also find that more than 40 percent of the retired elderly in Italy arecontinuing to accumulate wealth and that more than 80 percent are doing positive amountsof saving. Thus, the Wealth Decumulation Puzzle (the tendency of the retired elderly todecumulate their wealth more slowly than expected) appears to apply in the case of Italy,
as it does in most other countries, before as well as after the Global Financial Crisis.
Moreover, our regression analysis of the determinants of the wealth accumulation andsaving behavior of the retired elderly in Italy suggests that the lower than expected wealthdecumulation rates and dissaving of the retired elderly in Italy is due largely tointergenerational transfers (bequests and inter vivos transfers) and saving forprecautionary purposes, especially the former.
Journal of Economic Literature classification numbers: D12, D14, D15, D64, E21, J14
Keywords: Aged, bequests, bequest intentions, bequest motive, dissaving, elderly, estates,
household saving, Italy, inheritances, inter vivos transfers, intergenerational transfers,
life-cycle hypothesis, life-cycle model, life-cycle theory, precautionary saving, retired
elderly, saving, wealth, wealth accumulation, wealth decumulation, wealth decumulation
puzzleCorresponding author: Charles Yuji Horioka, Research Institute for Economics andBusiness Administration, Kobe University, 2-1, Rokkodai-cho, Nada-ku, Kobe, Hyogo
657-0813, JAPAN. Email: horioka@rieb.kobe-u.ac.jp

1. Introduction
The central tenet of the life-cycle model is that people work, earn income, and save(accumulate wealth) when young and retire and dissave (decumulate wealth) when old.
However, previous studies for most countries have found that the elderly continue toaccumulate wealth (save) or that they decumulate their wealth (dissave) but that their rateof wealth decumulation is slower than predicted by the simple life cycle model with nolifespan uncertainty and no bequest motives. For example, the country studies in Poterba(1994) show that median saving rates remain positive well beyond retirement in virtually
all countries.
At least two explanations have been proposed for this so-called “Wealth Decumulation
Puzzle” (see Mirer, 1979, for an early exposition of this puzzle). The first explanation isthat the retired elderly are continuing to accumulate wealth or are decumulating theirwealth (dissaving) more slowly than expected because they are worried about longevity
risk (lifespan uncertainty) and the possibility of facing high medical and long-term careexpenses in the future and that they are engaging in precautionary saving in response tothese worries. The second explanation, which of course is not mutually exclusive with thefirst, is that the retired elderly are continuing to accumulate wealth or are decumulating
their wealth (dissaving) more slowly than expected because they are saving in order toleave bequests and other intergenerational transfers to their children.
In this paper, we analyze the wealth accumulation and saving behavior of the retired
elderly in Italy using micro data from the 2000-02 and 2012-14 waves of the “Survey of
Italian Households’ Income and Wealth (hereafter SHIW),” a panel survey of households
conducted every two years by the Bank of Italy. We are particularly interested in shedding
light on whether or not the “Wealth Decumulation Puzzle” applies in the case of Italy, andif so, whether it is due to the presence of bequest motives and/or to the presence of
precautionary saving.
This paper makes a number of original contributions to the existing literature. First, it is
one of the first papers to examine whether the “Wealth Decumulation Puzzle” (thetendency of the retired elderly to decumulate their wealth more slowly than expected)
applies in the case of Italy. Second, it is one of the first papers to shed light on the relative
importance of bequest motives and precautionary saving as determinants of the wealthaccumulation and saving behavior of the retired elderly in Italy. Third, it makes direct use
1

of data on saving motives. Fourth, it is careful to construct a measure of the change in
wealth that includes only out-of-pocket saving and excludes capital gains and losses onreal estate and other components of wealth. Fifth, it takes account of the endogeneity ofbequest intentions and the intended bequest to wealth ratio by instrumenting for thesevariables. Fifth, it analyzes data before as well after the Global Financial Crisis to see
whether the behavior of households changed after the Global Financial Crisis.
This paper is closely related to several strands in the literature. Most obviously, it isrelated to the many studies that have been conducted in the United States and othercountries that attempt to shed light on the relative importance of bequest motives andprecautionary saving as explanations for the failure of the retired elderly to decumulate
their wealth as quickly as expected. For examples, studies for the U.S. include Bernheim(1987), Hurd (1987), Weil (1994), Poterba, et al. (2011), Palumbo (1999), Dynan, et al.
(2002), French, et al. (2006), De Nardi, et al. (2010), and Ameriks, et al. (forthcoming),
studies for Europe include Borsch-Supan (1992), Alessie, et al. (1995, 1999), andDobrescu (2015), and studies for Japan include Horioka, et al. (1996), Horioka (2010),
Usuki, et al., (2016), Horioka and Niimi (2017), Murata (2018), and Niimi and Horioka(2019) (see Hurd, 1990, De Nardi, et al. (2016), and Niimi and Horioka, 2019, for morecomprehensive literature surveys). Virtually all of these studies find that both bequest
motives and precautionary saving are important as explanations for the failure of theretired elderly to decumulate their wealth as quickly as expected.
Looking in particular at previous studies for Italy, Jappelli and Pagano (1997) find that
Italian households of all ages save positive amounts even though their saving rates havedeclined over time for almost all age groups. Similarly, Brugiavini and Padula (2001) findthat elderly households in Italy save positive amounts even after controlling formeasurement error and cohort effects. Miniaci and Weber (2003) find that Italianhouseholds fail to decumulate their financial assets after retirement and that, although
their housing wealth appears to decline after the age of 60, this is due largely to cohort
effects. Finally, Jappelli and Modigliani (2003) do a detailed analysis of the age-saving
profiles and age-wealth profiles of Italian households and find that discretionary wealth(exclusive of pension wealth) declines in old age, at least after the age of 65, but that
discretionary saving remains positive throughout the life cycle (at least until age 80) if it
is calculated as disposable income minus consumption. These findings, taken as a whole,strongly suggest that the “Wealth Decumulation Puzzle” applies in the case of Italy, as it
does in most other countries (see Jappelli, et al. (2014) for a more general survey of2household saving behavior in Italy).
As for why the “Wealth Decumulation Puzzle” is observed in the case of Italy, Miniaci
and Weber (2003) conclude that bequest and gift motives play an important role, and thefindings of Guiso and Jappelli (2002), Jappelli and Pistaferri (2005), and Cannari and
D’Alessio’s (2008) that bequests and other intergenerational transfers are substantial in
the case of Italy provide further corroboration for this view.
Turning to evidence on whether or not precautionary saving could be why the Wealth
Decumulation Puzzle applies in the case of Italy, Jappelli, Pistaferri, and Padula (2008)
find that precautionary saving is not very significant in the case of working-age
households in Italy, but this does not necessarily preclude the possibility that longevity
risk and the possibility of facing high medical and long-term care expenses in the future
motivates elderly households in Italy to engage in substantial precautionary saving.
Moreover, Guiso, Jappelli, and Padula’s (2009) finding that Italians facing more pension
wealth risk have a greater demand for targeted retirement saving and insurance suggeststhat Italians are risk-averse, that they are concerned about their living expenses after
retirement, and that they are engaging in precautionary saving for this purpose.
Thus, although there seems to be a consensus that the Wealth Decumulation Puzzles
applies in the case of Italy, there does not seem to be a consensus about whether bequest
motives or precautionary saving is the more important explanation
Another strand of literature to which this paper is related is the literature that attempts toassess the relative importance of various saving motives (see, for example, Horioka and
Watanabe, 1997, Alessie, et al., 1999, Horioka, et al., 2000, and Schunk, 2009). Horioka
and Watanabe (1997) and Horioka, et al. (2000) find that retirement and precautionary
motives are of predominant importance in both Japan and the United States, while Alessie,
et al. (1999) find that precautionary and bequest motives are both important in the
Netherlands, and Schunk (2009) finds that the precautionary, retirement, housing, andbequest motives (in roughly that order) are the most important motives for saving inGermany. These findings provide further corroboration that both bequest motives andprecautionary saving are important as explanations of the Wealth Decumulation Puzzle.
A final strand of literature to which this paper is related is the literature on bequest motives(see, for example, Hurd, 1989, Laitner and Ohlsson, 2001, Horioka, et al, 2002,3

Nishiyama, 2002, Brown, 2006, Altonji and Villanueva, 2007, Kopczuk and Lupton, 2007,
Horioka, 2014, and Lockwood, 2018; for comprehensive literature surveys, see Arrondel
and Masson, 2006, and Laferrere and Wolff, 2006). This literature analyzes the various
motives for which people leave bequests and what impact bequest motives have on
people’s saving and other behavior.
The analysis in this paper is meaningful not only because it sheds light on the wealthaccumulation and saving behavior of the retired elderly (who hold a substantial share ofhousehold wealth) and on the applicability of the life-cycle model but also because it has
important policy implications. For example, whether and the extent to which the retired
elderly decumulate their wealth (dissave) will determine what impact the aging of the
population will have on future trends in the aggregate household saving rate, and knowing
more about the determinants of the wealth accumulation and saving behavior of the retired
elderly will inform us about what policies would be most effective in stimulating theconsumption and raising the living standards of the retired elderly.
It is especially interesting to look at the case of Italy because household saving rates havetraditionally been very high in Italy, because the share of the elderly in the total populationin Italy is the highest in the EU, because the fertility rate is very low in Italy, and because
it would be interesting to shed light on the impact of Italy’s unique cultural andinstitutional setting (relative strong family ties, relatively underdeveloped financial
system, high government debt to GDP ratio, well-developed public pension system,
absence of a public long-term care insurance system, etc.) on the wealth accumulationand saving behavior of the retired elderly in Italy.
To summarize our main findings, we find that, on average, the retired elderly in Italy are
decumulating their wealth (dissaving) but that their wealth decumulation rates are muchslower than expected. Moreover, we also find that more than 40 percent of the retired
elderly in Italy are continuing to accumulate wealth and that more than 80 percent are
doing positive amounts of saving. Thus, the Wealth Decumulation Puzzle (the tendencyof the retired elderly to decumulate their wealth more slowly than expected) appears toapply in the case of Italy, as it does in most other countries, before as well as after the
Global Financial Crisis. Moreover, our regression analysis of the determinants of thewealth accumulation and saving behavior of the retired elderly in Italy suggests that
respondents with bequest motives and those saving for precautionary purposes show
higher wealth accumulation rates and higher amounts of saving than other respondents,4which suggests that the lower than expected wealth decumulation rates and dissaving of
the retired elderly in Italy is due largely to intergenerational transfers (bequests and intervivos transfers) and saving for precautionary purposes, especially the former.
The remainder of this paper is organized as follows. In section 2, we discuss theoreticalconsiderations; in section 3, we explain the estimation model we use for our regression
analysis of the determinants of the wealth accumulation and saving behavior of the retired
elderly in Italy; in section 4, we explain the data source and sample selection criteria we
use for our analysis; in section 5, we present and discuss some descriptive statistics; insection 6, we present and discuss our estimation results; and section 7 is a concluding
section that summarizes our findings and explores the policy implications of our findings.

2. Theoretical Considerations
In this section, we briefly discuss theoretical considerations. According to the simple life
cycle model, households work and save in preparation for their life after retirement when
young and retire and finance their living expenses by decumulating their previously
accumulated wealth when old (Modigliani and Brumberg, 1954). Moreover, in theabsence of bequest motives and precautionary saving arising from longevity risk andfuture medical and long-term care expenses, retired households should decumulate theirwealth so as to precisely exhaust their wealth at the time of death. If the wealthdecumulation rate of retired households is slower than predicted by the simple life cycle
model, it is presumably due to bequest motives and/or to precautionary saving arisingfrom longevity risk or future medical and long-term care expenses.
The purpose of this paper is to determine whether the retired elderly in Italy decumulate
their wealth (dissave) after they retire as predicted by the simple life cycle model andwhether or not their wealth accumulation and saving behavior is influenced by thepresence of bequest motives and precautionary saving.

3. The Estimation ModelIn this section, we explain the estimation model we use for our regression analyses of thedeterminants of the wealth accumulation and saving behavior of the retired elderly in Italy5based on data for the 2000-02 and 2012-14 waves of the Survey of Households’ Income
and Wealth.
3.1. The Estimation Model for the Regressions based on Data from the 2000-02
Waves
Dependent variables
We use two dependent variables in our analysis based on data from the 2000-02 waves of
SHIW.
(1) The wealth accumulation (decumulation) rate between 2000-02, calculated as thenatural logarithm of the ratio of wealth (net worth) in 2002 to wealth (net worth) in2000 in 2000 prices (following Spicer, et al., 2016). We use a comprehensive measureof wealth that is calculated as the sum of financial and real assets minus liabilities.
(2) The amount of saving in 2002, calculated as the residual between disposable income
and consumption expenditure in 2002. Consumption expenditure is a comprehensive
measure of expenditures on both nondurable and durable goods but excludes
maintenance payments and other financial contributions to non-cohabiting relatives
and friends, extraordinary maintenance payments and rent on one’s dwelling, andmortgage payments. Expenditures on nondurable goods include expenditures on foodproducts purchased in shops and supermarkets, meals eaten regularly outside thehome, and nonfood items, while expenditures on durable goods include expenditureson precious objects, means of transport, furniture, furnishings, household appliances,and sundry articles.
Note that these two measures of wealth accumulation or saving are calculated in totallydifferent and independent ways. The first of them is calculated from the net change in
wealth between the 2000 and 2002 waves, while the second of them is calculated using
only data from the 2002 wave by subtracting consumption expenditure from household
disposable income in that year. Since it is possible to compute wealth accumulation orsaving in these two very different ways, we decided to do so as a robustness check.
Turning to the explanatory variables, the ones of most interest to us are the ones relating
to bequest motives and precautionary saving:
Bequest-related variables(1) A dummy variable that takes a value of one if the respondent intends to leave a bequest6

to his or her children or grandchildren and zero otherwise(2) The ratio of the amount of the intended bequest that the respondent intends to leave
to his or her children or grandchildren to household wealth (net worth)
We would expect both bequest intentions and the ratio of the amount of the intended
bequest to wealth (hereafter referred to as the intended bequest to wealth ratio) to have apositive impact on the wealth accumulation rate because households that intend to leavea bequest (or that intend to leave a larger bequest) to their children would be expected tomoderate their rate of wealth decumulation so that they have enough wealth left over toleave as a bequest. Thus, if bequest intentions and/or the intended bequest to wealth ratio
are found to have a positive and significant impact on households’ wealth accumulation
rate, we will be able to conclude that bequest motives are one factor moderating thewealth decumulation and dissaving of the retired elderly in Italy. Needless to say, we do
not include the two bequest-related variables simultaneously because of the highcorrelation between them.
Precautionary saving-related variable
A dummy variable that takes a value of one if the respondent holds at least one insurance
product (life insurance, private health insurance, or insurance-based saving) and zerootherwise
If this variable is regarded as a proxy for respondents’ degree of risk aversion, we would
expect respondents holding at least one insurance product to be more risk-averse, toengage in more precautionary saving, and therefore to decumulate their wealth more
slowly. Thus, if ownership of insurance products is found to have a positive andsignificant impact on households’ wealth accumulation rate, as expected, we will be able
to conclude that precautionary saving is one explanation of the slower than expected
wealth decumulation rates of the retired elderly in Italy.
Control variables
Learning from Alessie, et al. (1995, 1999), we include a large number of control variables
including those relating to the respondent’s age, age squared, gender, marital status, andeducational attainment and the household’s wealth (net worth), housing type, the numberof non-cohabiting children, and city size (whether or not the respondent lives in a citywith a population of 500,000 or more). The reference category for marital status iswidowed, that for educational attainment is no schooling, and that for housing type is7

occupied in usufruct (temporary right to occupy) or occupied free of charge. We also
include regional dummies for Northern Italy (Piemonte, Valle d'Aosta, Lombardia,
Liguria, Trentino Alto Adige, Veneto, Friuli Venezia Giulia, and Emilia Romagna) andCentral Italy (Toscana, Marche, Umbria, and Lazio), with the reference category being
Southern Italy and Islands (Abruzzo, Molise, Campania, Puglia, Calabria, Basilicata,
Sicilia, and Sardegna). We will not discuss these control variables in detail due to space
limitations.
Note finally that there is the possibility of endogeneity, omitted variables, or reverse
causality between wealth accumulation rates and bequest intentions. For example, it could
be that there is an omitted variable (e.g., greater retirement needs) that is leading to higher
wealth accumulation rates as well as to weaker bequest intentions and lower intended
bequest to wealth ratios, thereby causing a downward bias in the coefficient of thebequest-related variables. We therefore also try estimating our regression equation using
two-stage least squares (TSLS) in addition to estimating it using ordinary least squares(OLS). We use the receipt of bequests and inter vivos transfers and the expectation ofreceiving bequests and inter vivos transfers as instruments for both bequest intentions andthe intended bequest to wealth ratio (which are never included together as explanatory
variables, as discussed earlier) because they are not necessarily correlated with wealthaccumulation rates but are likely to be correlated with bequests intentions (for example,
Niimi and Horioka, 2018, find that those who receive bequests and inter vivos transfers
are significantly more likely to leave bequests than those who did not receive bequests
and inter vivos transfers in both Japan and the United States, as do Cannari and D’Alessio,
2008, in the case of Italy). The usual tests confirm that these instruments are not weak
and that they are not correlated with the residuals.
3.2. The Estimation Model for the Regressions based on Data from the 2012-14
Waves
Dependent variables
We use the same two dependent variables that we use in our analysis of data from the
2000-02 waves for our analysis of data from the 2012-14 waves.
Bequest-related variables
We had no choice but to use different bequest-related variables from those used in our
analysis based on data from the 2000-02 waves because information on bequest intentions
8and the intended value of bequests is not available in the 2012 and 2014 waves.
Information is available on whether or not respondents have received bequests and intervivos transfers in the past, and since Niimi and Horioka (2018) found that those who
receive bequests are significantly more likely to leave bequests themselves than those
who did not receive bequests, as did Cannari and D’Alessio (2008) in the case of Italy,
we used the following variable as a proxy for bequest intentions:(1) A dummy variable that takes a value of one if the respondent has received a bequest
or inter vivos transfer in the past and zero otherwise
Moreover, since information is collected on respondents’ saving motives in the 2014 wave
(respondents are asked to select their three most important motives for saving from amongten choices), we include the following variables as proxies for bequest intentions in oursaving regressions:(2) A dummy variable that takes a value of one if the respondent is saving to give intervivos transfers to children and grandchildren (i.e., to pay for their education andeconomic support) and zero otherwise(3) A dummy variable that takes a value of one if the respondent is saving in order toleave bequests to children and grandchildren and zero otherwise
If these bequest-related variables are found to have a positive and significant impact on
the wealth accumulation rates and saving amounts of the retired elderly in Italy, this canbe construed as corroborative evidence that bequest motives are one factor moderating
the wealth decumulation and dissaving of the retired elderly in Italy.
Precautionary saving-related variables
We were able to include three variables relating to precautionary saving because of theavailability of data on saving motives:(1) The same dummy variable for ownership of insurance products that we use in the caseof our analysis based on data from the 2000-02 wave
(2) A dummy variable that takes a value of one if the respondent is saving for old age andzero otherwise(3) A dummy variable that takes a value of one if the respondent is saving for unexpected
contingencies and zero otherwise
If insurance ownership and/or saving for old age and for unexpected contingencies arefound to have a positive and significant impact on the wealth accumulation and saving
9behavior of the retired elderly in Italy, as expected, we will be able to conclude that savingfor precautionary saving is one explanation for the less prevalent than expected wealthdecumulation and saving of the retired elderly in Italy.
Unfortunately, however, the variables relating to saving motives could be included onlyin the regressions for the amount of saving because information on these variables wascollected only in the 2014 wave.
Control variables
We include the same control variables that we include in the case of our analysis basedon data from the 2000-02 wave.
4. Data Source and Sample Selection
In this section, we explain the data source and sample selection criteria we use for ouranalysis. The data set we use is the “Survey of Italian Households’ Income and Wealth(hereafter SHIW),” which has been conducted by the Bank of Italy since 1965 (and as apanel survey since 1989). This data set is ideally suited for the topic of this paper because
it includes detailed data on the flow of saving, the stock of wealth (net worth), bequest
intentions, the value of the intended bequest, saving motives, preference parameters suchas those relating to time preference and risk aversion, demographic and economic
characteristics, etc.
Each wave of the Survey, which has been conducted as a panel every two years since
1989, collects information on about 8000 households randomly chosen from population
registers (attrition hovers around 20% per wave). The Survey is very rich and collects
information on virtually every aspect of households’ lives, including social anddemographic characteristics (such as age, gender, educational attainment, type of job,
number of income earners, dynamics of the household in terms of members entering andleaving, information about parents and spouse’s parents, etc.), consumption (including
detailed breakdown by type), income, gross and net wealth, and categories thereof.
Importantly, some waves of the SHIW include special sections devoted to particular
aspects of households’ lives, and we were drawn to the 2002 and 2014 waves of the survey
because the 2002 wave included a special section on intergenerational transfers, withinformation on bequests and inter vivos transfers received, bequest intentions, and the10amount of intended bequests, and because the 2012 wave asked about bequests and intervivos transfers received as well as about saving motives.1
Since data from two consecutive waves are needed to calculate the wealth accumulation
rate, we used the 2000-02 and 2012-14 waves to calculate the wealth accumulation rate,
but we used the values of the explanatory variables in the earlier of the two waves (2000
and 2012, respectively) in order to mitigate potential endogeneity issues. The only
exception to this rule was that we had to use the 2002 and 2014 values of the bequestrelated variables because these variables were not available in 2000 or 2012. However,
we do not believe that this will seriously bias our results because these variables pertain
to intentions and preferences and are therefore presumably relatively stable over time.
By contrast, since the amount of saving could be calculated from just one wave of data,
the saving regressions were estimated using cross-sections of the 2002 and 2014 waves
to benefit from a much larger number of observations, and thus the control variables referto the same year. However, since the control variables are mostly sociodemographic andgeographic variables that are relatively stable over the short time span used for ouranalysis, we do not believe that our procedure will introduce any serious biases in our
results.
We confine our sample to only single-person or couple households in which both thehusband and wife are 60 or older and retired to avoid the problem of having to allocate
saving, wealth, etc., to cohabiting household members. We also confine our sample tohouseholds with at least one non-cohabiting child since we are interested in looking at the
impact of bequest intentions on wealth accumulation behavior and since respondents withno living children are unlikely to have a bequest motive. We also drop observations forwhich all of the necessary information is not available as well as observations whose
wealth accumulation rate is less than -200% or more than 300% in order to purge thesample of outliers.
These conditions, in particular the condition that no household member works, greatly
reduced the size of the sample and left us with only 302 observations in the 2000-02
waves and 1041 observations in the 2012-14 waves for our analysis of the wealth11accumulation rate and with 790 or 664 observations for the 2002 wave (depending on
which variables are included) and 2328 observations for the 2014 wave for our analysisof the amount of saving. We should note, however, that sample weights provided by the
Bank of Italy were always used for both the descriptive statistics and the regressions toensure that our sample remained representative of the universe of households fulfillingthe aforementioned criteria.
Special care has been taken to construct a measure of the change in wealth that includes
only out-of-pocket saving and excludes capital gains and losses on real estate, equities,
and bonds. Real estate, which constitutes the bulk of wealth (net worth), is evaluated atconstant prices to avoid the risk of including positive (or negative) changes in wealth thatare due solely to housing price inflation or deflation. To obtain the value of real estate atconstant prices, real estate in 2002 and 2014 was valued at 2000 and 2012 prices
whenever possible (i.e., whenever the same property was owned in both periods) anddeflated by a real estate deflator otherwise.2 In fact, the former method was applied to 75
percent of households in the 2000-2002 panel and to about 80 percent of households inthe larger 2012-2014 panel. For these households, therefore, changes in net worth are due
entirely to changes in holdings of financial assets and liabilities. Equities and (in the caseof the analysis based on data from the 2012-14 waves) bonds were also evaluated atconstant prices for the same reason.3 All other components of wealth (net worth) in 2002
were deflated using the consumer price index.

5. Descriptive Statistics
In this section, we present and discuss some descriptive statistics. Table 1 shows
descriptive statistics (medians, means, standard deviations, and minimum and maximum
values) for all dependent and explanatory variables used in our regression analysis. In
what follows, we will refer primarily to medians rather than to means because medians
are less influenced by extreme values than are means.
As this table shows, the median wealth decumulation rate was 2.3 percent in 2000-02 and0.6 percent in 2012-14, which corresponds to an annual wealth decumulation rate of 1.2
and 0.3 percent, respectively. Thus, the retired elderly in Italy were decumulating theirwealth (dissaving) before as well as after the Global Financial Crisis of 2007-08, as
12

predicted by the simple life cycle model, but their wealth decumulation rates are far too
slow if one takes account of the fact that life expectancy at age 60 in Italy was 25 years
in 2015.4 Moreover, the wealth decumulation rate of the retired elderly in Italy was evenlower in 2012-14 than it was in 2000-02, possibly because the increased uncertainty
caused by the Global Financial Crisis caused the retired elderly in Italy to moderate their
speed of wealth decumulation and dissaving even more than they had been doing
previously.
Moreover, the proportion of the retired elderly with a positive wealth accumulation rate
was a full 42.4 percent in 2000-02 and a full 44.1 percent in 2012-14, and the proportionof the retired elderly engaging in a positive amount of saving was a full 84.4 percent in2002 and a full 89.5 percent in 2014.5
All of the foregoing evidence strongly suggests that the Wealth Decumulation Puzzle
applies in the case of Italy, especially after the Global Financial Crisis. This is consistent
with the findings of the studies for Italy that we surveyed earlier and with the findings formost other countries also.
Table 1 also shows that the roughly half (50.7 percent) of the retired elderly in Italy intend
to leave bequests to their children and that intended bequests are a full 56.5 percent ofhousehold wealth. Both of these figures suggest that bequest motives are quite strong in
Italy.
Table 2 shows the proportion of households saving for each of four saving motives, andas can be seen from this table, 15.7 percent of respondents are saving for inter vivos
transfers and 71.4 percent are saving for bequests, which suggests that saving for bequests
and other intergenerational transfers is important. At the same time, 54.8 percent ofrespondents are saving for unforeseen contingencies and 32.9 percent are saving for oldage, which suggests that saving for precautionary purposes is also important.
Table 3 shows the median wealth accumulation rate in 2000-02 and 2012-14 broken downby the age and marital status of the household head, and as can be seen from this table,
the wealth accumulation rate is negative in all age groups and all marital statuses in bothtime periods (except for one exception in 2012-14), which is consistent with the simple
life cycle model. However, the wealth decumulation rate is slower than expected (except
in the 81 or older age group in 2000-02), which suggests that the Wealth Decumulation
13

Puzzle is observed in virtually all age groups and all marital statuses. Moreover, thewealth decumulation rate is lower in 2012-14 than in 2000-02 in all cases except one,which further corroborates our earlier finding that the Global Financial Crisis caused theretired elderly in Italy to moderate their speed of wealth decumulation even more thanthey had been doing previously. Finally, Table 2 shows that the wealth decumulation rate
is highest in the 81 or older age group in both time periods, which is as one would expect
given that medical and long-term care expenses tend to increase with age.
We then tried calculating median wealth accumulation rates by various attributes such as
bequest intentions, the intended bequest to wealth ratio, and insurance ownership.
First, we calculated the median wealth accumulation rate for respondents with andwithout bequest intentions and found that it is 6.4 percent for those with bequest intentions
and -22.1 percent for those without such intentions, a gap of a full 28.5 percentage points.
Next, we calculated the median wealth accumulation rate by quintile of the intended
bequest to wealth ratio and found that the median wealth accumulation rate increases with
the intended bequest to wealth ratio, as expected, from -21.7 percent in the lowest quintile
to 24.5 percent in the highest quintile, a gap of a full 46.4 percentage points.
Finally, we calculated the median wealth accumulation rate for respondents who own aninsurance product and those who do not, and found that it is 1.5 percent for those who
own an insurance product and -2.6 percent for those who do not, a gap of 4.1 percentage
points. This suggests that saving for precautionary purposes may be somewhat importantin the case of the retired elderly in Italy.
Thus, our descriptive statistics suggest that both bequest motives and precautionarysaving are important in the case of Italy and that both appear to have a substantial impact
on the wealth accumulation and saving behavior of the retired elderly in Italy, especiallythe former, but we need to do a regression analysis to determine whether these results
hold even after controlling for other variables.

6. Estimation Results
6.1. Estimation Results based on Data from the 2000-02 Waves
14

In this section, we present the estimation results of our regression analysis of thedeterminants of the wealth accumulation and saving behavior of the retired elderly in Italy
based on data from the 2000-02 waves. The results for the wealth accumulation rate areshow in Tables 4 and 5 (the ordinary least squares (OLS) results in Table 4 and the twostage least squares (TSLS) results in Table 5), whereas the results for the amount of saving
are shown in Table 6.
Looking first at the impact of bequest intentions and the intended bequest to wealth ratio,
Tables 4 and 5 show that both bequest intentions and the intended bequest to wealth ratio
have a positive and statistically significant impact on the wealth accumulation rate in the
OLS estimates as well as in the TSLS estimates, as expected. In fact, the coefficients ofboth bequest intentions and the intended bequest to wealth ratio are larger and moresignificant in the TSLS estimates, suggesting that the impact of bequests on wealthaccumulation rates is robust and even stronger after controlling for endogeneity, omitted
variable bias, and reverse causality. Indeed, the direction of the OLS bias suggests that anomitted variable (e.g., greater retirement needs) is leading to higher wealth accumulation
rates as well as to weaker bequest intentions and lower intended bequest to wealth ratios,
which in turn is leading to a downward bias in the coefficients of the bequest-related
variables in the OLS regressions.
As for how the impact of bequest intentions on the wealth accumulation rate of the retired
elderly in Italy compares to that for other countries, the OLS coefficient for Italy is lower
than the OLS coefficient for Japan in a very similar study (Niimi and Horioka, 2019), but
the TSLS coefficient for Italy is higher. 6 This suggests that the impact of bequest
intentions is roughly comparable in the two other countries, which is reassuring because
the two countries are similar in many ways (e.g., close family ties, aged populations,traditionally high saving rates, etc.).
We then tried replacing the bequest intentions variable with interactive terms between
bequest intentions and age group dummies to see whether or not the impact of bequest
intentions on the wealth accumulation rate varies by age. The results are shown in the lastcolumn of Table 4, and as can be seen from this column, the impact of bequest intentions
varies greatly by age, with its impact being the largest and most statistically significant in
the 60-64 age group, smaller but still statistically significant in the 65-69 age group, andnot statistically significant in the 70-74 and 75 or older age groups. Our finding that the15

impact of bequest intentions on the wealth accumulation rate declines sharply with age is
new but not surprising because, as people age, their medical and long-term care expenses
tend to increase, making it increasingly difficult to moderate wealth decumulation even
if they have a bequest motive.
Looking next at the impact of bequests on the amount of saving, Table 6 shows thatbequest intentions have a positive and statistically significant impact on the amount ofsaving but that the intended bequest to wealth ratio does not have a statistically significant
impact thereon. Thus, almost all of our results suggest that bequest motives are one
explanation for the lower than expected wealth decumulation rates and dissaving of theretired elderly in Italy.
Turning next to the impact of insurance ownership, it does not have a statisticallysignificant impact on the wealth accumulation rate in either the OLS or TSLS estimates,
perhaps because we have not adequately controlled for the endogeneity of insurance
ownership. However, insurance ownership has a positive and statistically significant
impact on the amount of saving, as expected. This constitutes weak evidence that savingfor precautionary purposes is one explanation for why the retired elderly in Italy dissave
less than expected.
Turning finally to the impact of the control variables, and looking first at their impact on
the wealth accumulation rate, separated or divorced respondents seem to havesignificantly lower wealth accumulation rates, homeowner households seem to havesignificantly higher wealth accumulation rates, and wealth seems to have a negative andstatistically significant impact on the wealth accumulation rate. As for the impact of thecontrol variables on the amount of saving, married and more highly educated respondents
and respondents living in the North seem to have significantly higher amounts of saving.
6.2. Estimation Results Based on Data from the 2012-14 Waves
In this section, we present the estimation results of our regression analysis of thedeterminants of the wealth accumulation rate and saving behavior of the retired elderly in
Italy based on data from the 2012-14 waves. The results for the wealth accumulation rate
are show in the first column of Table 7 whereas the results for saving are shown in thesecond column of the same table.

16

Looking first at bequest-related variables, bequest receipts (which are included as a proxyfor bequest intentions) are found to have a positive and statistically significant impact on
the wealth accumulation rate. Bequest receipts are found not to have a statisticallysignificant impact on the amount of saving, but dummy variables for saving for inter vivos
transfers and saving for bequests (which are included to capture the impact of bequest
motives) are both found to have a positive and statistically significant impact on theamount of saving. These results provide further corroboration that the lower than expected
wealth accumulation and dissaving of the retired elderly in Italy are due largely to bequest
motives.
Turning next to the impact of precautionary saving-related variables and looking first at
the impact of insurance ownership, it is found not to have a statistically significant impact
on the wealth accumulation rate but is found to have a positive and statistically significant
impact on saving, as in the case of the results based on the 2000-02 waves. These results
provide further (weak) corroboration that saving for precautionary purposes is one
explanation why the retired elderly in Italy dissave less than expected.
Looking next at the impact of saving for old age and saving for unexpected contingencies,
both motives for saving have a positive and statistically significant impact on the amountof saving of the retired elderly in Italy, which provides stronger corroboration that savingfor precautionary purposes may be an important explanation for why the retired elderly
in Italy dissave less than expected.
Turning finally to the impact of the control variables and looking first at their impact on
the wealth accumulation rate, male respondents seem to have a significantly higher wealthaccumulation rates and wealth seems to have a negative and statistically significant
impact on the wealth accumulation rate. As for the impact of the control variables on theamount of saving, married respondents and respondents living in the North seem to havesignificantly higher amounts of saving while primary school graduates and renterhouseholds seem to have significantly lower amounts of saving.
6.3. Summary of Estimation Results

To summarize the findings of our analysis of the wealth accumulation and saving behaviorof the retired elderly in Italy, our estimation results for the two waves are broadly
consistent with one another and suggest that bequest motives and (to a lesser extent)17

saving for precautionary purposes are both important as explanations of the lower than
expected wealth decumulation rates and dissaving of the retired elderly in Italy.

7. Conclusion
In this paper, we analyzed the wealth accumulation and saving behavior of the retired
elderly in Italy using micro data from the “Survey of Italian Households’ Income and
Wealth,” a panel survey of households conducted every two years by the Bank of Italy.
We were particularly interested in shedding light on whether or not the “Wealth
Decumulation Puzzle” (the tendency of the retired elderly to decumulate their wealthmore slowly than expected) applies in the case of Italy, and if so, why.
To summarize our main findings, we found that, on average, the retired elderly in Italy
are decumulating their wealth (dissaving) but that their wealth decumulation rates aremuch slower than expected. Moreover, we also found that more than 40 percent of theretired elderly in Italy are continuing to accumulate wealth and that more than 80 percent
are doing positive amounts of saving. Thus, the Wealth Decumulation Puzzle (thetendency of the retired elderly to decumulate their wealth more slowly than expected)
appears to apply in the case of Italy, as it does in most other countries, before as well as
after the Global Financial Crisis. Moreover, our regression analysis of the determinantsof the wealth accumulation and saving behavior of the retired elderly in Italy suggested
that respondents with bequest motives and those saving for precautionary purposes show
higher wealth accumulation rates and higher amounts of saving than other respondents,
which implies that the lower than expected wealth decumulation rates and dissaving of
the retired elderly in Italy is due largely to intergenerational transfers (bequests and intervivos transfers) and saving for precautionary purposes, especially the former.
Turning next to directions for further research, the most important direction for further
research is to estimate a full structural model. Another direction for further research is todo similar analyses for other countries and to assess whether institutional, legal, andcultural factors influence the wealth accumulation and saving behavior of the retired
elderly. A comparison between Italy and Japan suggests that the wealth accumulation andsaving behavior of the retired elderly in the two countries is broadly consistent but thatthe impact of bequest motives is relatively more important in Italy whereas the impact ofsaving for precautionary saving is relatively more important in Japan (see Niimi and18

Horioka, 2019).
We turn finally to the implications of our findings. First, our findings show that the wealthaccumulation and saving behavior of the retired elderly in Italy is consistent with the life
cycle model once we take account of bequest motives and saving for precautionary
purposes. Second, our finding that the retired elderly in Italy are decumulating theirwealth (dissaving) relatively slowly implies that Italy’s household saving rate will not
decline precipitously as her population ages (see Weil, 1994). Third, our finding that theretired elderly in Italy are decumulating their wealth so slowly due largely to bequest
motives and saving for precautionary purposes implies that we can stimulate theirconsumption by (1) raising inheritance taxes, thereby weakening their incentive to leave
bequests, and/or (2) by expanding social safety nets, thereby alleviating their need to savefor precautionary purposes.

Acknowledgements
We are grateful to Ali Akkemik, Marianna Brunetti, Elena Capatina, Javier Gardeazabal,
Thesia Garner, Shoshana Grossbard, Tatsuo Hatta, Takashi Kurihara, Anne Laferrere, Ran
Sun Lyng, Eric D. Ramstetter, Paolo M. Silva, Timothy Smeeding, Xiaonan Sun, Tien
Manh Vu, Midori Wakabayashi, Junmin Wan, Takashi Yamashita, other participants of
the Osaka University Conference on Household Economics, the Staff Seminar of the
Asian Growth Research Institute, the Annual Meeting of the Society of Economics of theHousehold (SEHO), the Econometric Society Australasian Meeting (ESAM), the General
Conference of the International Association for Research in Income and Wealth (IARIW),
and the International Workshop on the Socio-economics of Ageing (IWSEA), threeanonymous referees, and especially Yoko Niimi for their valuable comments. This work
was supported by JSPS (Japan Society for the Promotion of Science) KAKENHI Grant
Numbers 15H01950, 18H00870, and 15H05728, a project grant from the Asian Growth
Research Institute, a grant from the Ministry of Education, Culture, Sports, and Scienceand Technology (MEXT) Joint Usage/Research Center at the Institute of Social andEconomic Research, Osaka University, the Osaka University International Joint Research
Promotion Program, and grant number RP116154D0309987 from Sapienza, Universityof Rome.

19

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25

Table 1: Descriptive Statistics for All Variables, 2000-02 Waves
Std.
VariableObs. Median Mean dev.
Min
Max
Bequest intentions
302 1.000 0.507 0.038 0.000 1.000
Value of intended bequest (10,000 euros)
302 0.000 8.291 1.015 0.000 118.687
302 0.000 0.565 0.055 0.000 5.344
Intended bequest to wealth ratio
Insurance
302 0.000 0.089 0.285 0.000 1.000
302 0.000 0.145 0.025 0.000 1.000
Bequests receipts
Bequest expectations
302 0.000 0.029 0.010 0.000 1.000
Household head’s age
302 73.000 73.536 0.611 61.000 99.000
Household head’s age^2/100
302 53.290 54.628 0.923 37.210 98.010
Male
302 1.000 0.551 0.038 0.000 1.000
Married302 1.000 0.540 0.038 0.000 1.000
Single302 0.000 0.005 0.003 0.000 1.000
Separated/divorced
302 0.000 0.042 0.017 0.000 1.000
Number of non-cohabiting children
302 2.000 2.267 1.197 1.000 8.000
No schooling
302 0.000 0.157 0.033 0.000 1.000
Elementary school
302 1.000 0.606 0.038 0.000 1.000
Middle school
302 0.000 0.116 0.022 0.000 1.000
Vocational secondary school
302 0.000 0.020 0.009 0.000 1.000
High school
302 0.000 0.071 0.018 0.000 1.000
Post-secondary
302 0.000 0.031 0.010 0.000 1.000
Homeowner
302 1.000 0.747 0.035 0.000 1.000
Renter
302 0.000 0.124 0.025 0.000 1.000
Redemption (renting with option to buy)
302 0.000 0.004 0.004 0.000 1.000
Major city
302 0.000 0.086 0.024 0.000 1.000
North
302 0.000 0.436 0.497 0.000 1.000
302 0.000 0.161 0.369 0.000 1.000
Center
Net worth in 2000 (10,000 euros)
302 8.883 13.328 1.111 -0.258 173.530
Wealth accumulation rate, 2000-02 (percent)
302 -2.341 -7.515 3.875 -100.000 270.188
Saving in 2002 at 2000’s prices (10,000 euros)
302 0.196 0.383 0.047 -1.332 3.673
Source: Bank of Italy, Survey of Italian Households’ Income and Wealth26

Table 2: Descriptive Statistics for All Variables, 2012-14 Waves
Std.
dev.
VariableObs. Median MeanMin
Bequests received
1041 0.000
0.189 0.015
0.000Insurance
1041 0.000
0.063 0.009
0.000
Saving for education/economic support (inter vivos
transfers) to children and grandchildren
1041 0.000
0.157 0.015
0.0001041 1.000
0.714 0.018
0.000
Saving for bequests to children and grandchildren
Saving for unforeseen contingencies
1041 1.000
0.548 0.020
0.000
Saving for old age needs
1041 0.000
0.329 0.019
0.000Household head’s age
1041 76.000 75.605 0.311 60.000
Household head’s age^2/100
1041 57.760 57.786 0.477 36.000
Male1041 0.000
0.460 0.020
0.000Married1041 1.000
0.513 0.020
0.000Single1041 0.000
0.001 0.001
0.0001041 0.000
0.056 0.009
0.000
Separated/divorced
Number of non-cohabiting children
1041 2.000
2.161 0.042
1.000
No schooling1041 0.000
0.112 0.014
0.000
Elementary school
1041 0.000
0.422 0.020
0.000Middle school
1041 0.000
0.216 0.016
0.000
Vocational secondary school
1041 0.000
0.058 0.009
0.000High school
1041 0.000
0.128 0.012
0.000
Post-secondary
1041 0.000
0.063 0.010
0.000
Homeowner
1041 1.000
0.773 0.017
0.0001041 0.000
0.111 0.013
0.000
RenterRedemption (renting with option to buy)
1041 0.000
0.002 0.001
0.000
Residing in a major city
1041 0.000
0.086 0.013
0.000
geographical area, North
1041 0.000
0.422 0.019
0.000
geographical area, Center
1041 0.000
0.186 0.016
0.000
Net worth in 2012 (10,000 euros)
1041 16.550 25.133 1.396-1.4131041 16.932 24.150 1.274-0.067
Net worth in 2014 (10,000 euros)
Wealth accumulation rate, 2012-14
1041 -0.568
2.014 2.544 164.871
Amount of saving in 2014 (10,000 euros)
1041 0.350
0.526 0.028-3.541
Source: Bank of Italy, Survey of Italian Households’ Income and Wealth
3

27

Max
1.000
1.000
1.000
1.000
1.000
1.000
101.000
102.010
1.000
1.000
1.000
1.000
7.000
1.000
1.000
1.000
1.000
1.000
1.000
1.000
1.000
1.000
1.000
1.000
1.000
569.695
573.454291.546
5.973

Table 3: Median Wealth Accumulation Rates by Age and Marital Status
2000-022012-14

No. of obs.

Median wealthaccumulation rate

No. of obs.

Median wealthaccumulation rate

60-70

113

-2.34

333

-0.23

71-80

133

-1.38

430

-0.56

81 or older

56

-6.43

278

-1.76

Single

3

-1.38

2

0.63

Married

175

-1.96

578

-0.97

Separate/divorced

10

-0.11

56

-1.11

Widowed

114

-2.67

405

-1.22

Full sample
302
-2.34
1041
Source: Bank of Italy, Survey of Households' Income and Wealth-0.57

Age group

Marital status

28

Table 4: The Determinants of the Wealth Accumulation Rate, 2000-02 Waves(Ordinary Least Squares Estimates)
Wealth accumulation rate, 20002002 (percent)Bequest intentions

Wealth accumulation rate, 200002 (percent)

Wealth accumulation rate, 200002 (percent)13.951(6.288)**Bequest intentions

59.635(>=60, <65)

(14.892)***Bequest intentions

18.588(>=65, <70)
Bequest intentions(>=70, <75)
Bequest intentions(>=75)
Intended bequest
to wealth ratio
Insurance(10.269)*8.760(11.654)-8.839(9.637)

Household head'sageHousehold head'sage^2/100
Male
MarriedSingleSeparated/divorced
Number of noncohabiting children
Elementary school
Middle school
Vocational
secondary school
High school
Post-secondary
Homeowner
RenterRedemption (renting
with option to buy)
Major city
North
CenterHouseholds' wealthin 2000 (in 10,000
euros)
Constant
R2
N

7.728
(12.055)
9.047(5.595)-6.457(3.748)*-4.490(7.438)-10.010(8.813)10.389(26.744)

16.323(4.555)***8.930(11.684)
8.492(5.638)-6.069(3.783)-5.677(7.546)-9.378(8.590)11.485(23.729)

10.210(12.424)
19.277(20.754)-12.644(14.556)-12.933(7.866)-0.300(10.204)
7.187(22.979)-40.910(18.373)**
0.693(2.701)-7.043(11.730)
32.101(14.676)**
11.510(18.028)
16.571(18.724)-1.485(14.739)49.184(13.724)***7.105(19.515)32.740(17.589)*-1.297(16.321)5.704(7.570)19.581(9.534)**-0.515(0.152)***-40.258(18.190)**
1.533(2.815)-6.821(11.742)31.816(14.972)**
5.615(17.051)
8.211(18.636)0.338(14.247)46.027(13.465)***
6.541(19.360)
33.297(17.212)*0.529(16.402)
8.224(7.370)18.799(9.433)**-0.426(0.134)***-36.796(17.812)**0.900(2.622)-28.687(16.906)*
16.682(19.121)-32.284(28.411)-7.112(27.032)-20.133(22.883)
24.814(21.238)-24.580(24.476)
24.479(23.335)-3.069(16.077)
11.772(7.273)11.058(7.554)-0.449(0.168)***-357.047(205.275)*
0.30
302

-340.657(206.463)
0.33
302-730.965(737.572)
0.31
246

Notes: * p<0.1; ** p<0.05; *** p<0.01

29

Table 5: The Determinants of the Wealth Accumulation Rate, 2000-02(Two-stage Least Squares Estimates)
Wealth accumulation rate,

Wealth accumulation

2000-2002 (percent)rate, 2000-2002(percent)

Bequest intentions

54.726(27.756)**

Intended bequest to

34.210

wealth ratio(15.023)**

Insurance

8.280

10.453(12.776)(12.022)

8.710

7.757

age

(5.970)(5.717)

Household head's-6.287-5.580age^2/100(4.033)(3.835)Male-5.164-7.230(8.616)(8.384)-15.618-10.787(9.304)*(8.747)-11.0334.655(31.011)(21.763)-33.046-36.595(18.515)*(17.726)**-11.929-8.410(12.804)(12.131)36.61033.194(16.611)**(15.587)**

3.199-3.961(18.196)(18.184)5.766-5.000Household head's

MarriedSingleSeparated/divorced

Elementary school

Middle school

Vocational
secondary school
High school30

(21.131)(23.155)-13.664-2.229(19.876)(14.836)

2.079

2.973

cohabiting children(3.348)(3.370)Homeowner

31.14235.803(18.186)*(14.795)**

9.254

6.729

(18.621)(18.563)-2.68520.627(28.530)(18.978)-0.0068.845(8.947)(7.564)13.141

15.526(11.560)(10.064)-2.3302.142(15.324)(15.792)-0.496-0.322(0.163)***(0.171)*-341.742-316.961(217.271)(209.944)

0.20

0.28

Post-secondary

Number of non-RenterRedemption(renting with option
to

buy)

North

CentralMajor city

Wealth in 2000 (in10,000 euros)
Constant

R2
N

302

Notes: * p<0.1; ** p<0.05; *** p<0.01

31

302

Table 6: The Determinants of the Amount of Saving, 2000-02 Waves(Ordinary Least Squares Estimates)
Amount of saving in 2002 at
2000 prices (in 10,000 euros)
Bequest intentions

Amount of saving in 2002 at
2000 prices (in 10,000 euros)

0.067(0.034)*

Intended bequest to
wealth ratio-0.005(0.021)

Insurance

0.135(0.092)0.175(0.099)*Household head's age

0.015(0.026)0.005(0.027)-0.010(0.017)0.033(0.036)0.090(0.040)**0.092(0.153)-0.119(0.052)**0.001(0.011)
0.019(0.030)0.110(0.047)**0.103(0.118)0.155(0.071)**
0.529(0.127)***0.047(0.039)-0.118(0.044)***-0.122(0.099)0.003(0.017)-0.005(0.039)0.127(0.044)***0.084(0.137)-0.109(0.068)0.001(0.012)-0.007(0.031)
0.111(0.052)**0.153(0.114)0.127(0.076)*0.522(0.138)***0.074(0.042)*-0.149(0.047)***-0.111(0.104)

Household head'sage^2/100
Male
MarriedSingleSeparated/divorced
Number of noncohabiting children
Elementary school
Middle school
Vocational secondary
schoolHigh school
Post-secondary
Homeowner
RenterRedemption (renting
with intention to buy)32

Major city
North
CenterHouseholds' wealthin 2002 at 2000
prices (in 10,000
euros)
Constant

0.029(0.041)0.130(0.032)***-0.009(0.034)-0.000(0.002)0.009(0.046)0.158(0.035)***-0.013(0.034)-0.000(0.002)-0.489(1.019)0.23
790-0.088(1.049)
0.26
664

R2
N
Notes: * p<0.1; ** p<0.05; *** p<0.01

33

Table 7: The Determinants of the Wealth Accumulation Rate and Saving, 2012-14(Ordinary Least Squares Estimates)
Wealthaccumulation rate,
2012-2014 (percent)Bequest receipts
Insurance

Saving in 2014 at2012 prices (in10,000 euros)

12.131(7.097)*-9.146(5.683)-0.025(0.060)0.380(0.161)**0.134(0.050)***0.104(0.039)***-5.605(5.432)
3.229(3.565)9.862(5.947)*-4.339(5.455)-3.495(9.319)-3.309(14.003)
10.483(13.506)
0.937(15.638)0.845(15.708)
9.963(15.751)
21.577(15.908)
1.941(2.477)
20.268(13.627)
13.401

0.031(0.033)-0.020(0.021)
0.082(0.052)0.203(0.054)***-0.017(0.139)0.046(0.168)-0.082(0.037)**-0.002(0.082)-0.073(0.101)0.100(0.143)0.442(0.288)-0.017(0.011)
0.017(0.102)-0.274

Saving for inter vivos
transfers
Saving for bequests
Saving for unforeseen
contingencies
Saving for old age
Household head's age
Household head'sage^2/100
Male
MarriedSingleSeparated/divorced
Elementary school
Middle school
Vocational secondary
schoolHigh school
Post-secondary
Number of noncohabiting children
Homeowner
Renter34

Saving in 2014 at2012 prices (in10,000 euros)-0.038(0.061)
0.390(0.161)**0.151(0.051)***0.134(0.042)***0.122(0.047)***0.035(0.039)0.032(0.033)-0.020(0.021)0.086(0.052)0.194(0.055)***-0.034(0.137)0.048(0.168)-0.090(0.037)**-0.011(0.082)-0.076(0.101)0.088(0.143)0.439(0.285)-0.019(0.011)*
0.025(0.102)-0.260Redemption (renting
with option to buy)
North
CentralMajor city
Households' wealth in2012 (in 10,000 euros)
Households' wealth in2014 at 2012s prices (in10,000 euros)
Constant
R2
N(18.513)79.826(59.651)0.650(6.312)-3.937(6.073)0.892(6.728)-0.258(0.090)***213.369(203.819)
0.05
1,041

Notes: * p<0.1; ** p<0.05; *** p<0.01

35(0.060)***0.028(0.131)
0.195(0.049)***0.114(0.063)*-0.057(0.089)(0.060)***0.026(0.120)0.197(0.049)***0.098(0.062)-0.059(0.088)0.007(0.005)0.007(0.005)-1.340(1.325)0.27
2,328-1.560(1.326)0.27
2,328

Endnotes
1

Moredetails

about

this

Survey

can

be

found

at

the

followingurl:

https://www.bancaditalia.it/statistiche/tematiche/indagini-famiglie-imprese/bilancifamiglie/distribuzione-microdati/index.html
2

The Real Property Price Index of the European Central Bank was used, and data on this index

were

taken

from http://sdw.ecb.europa.eu/quickview.do?SERIES_KEY=129.RPP.A.IT.N.TD.00.2.00
3

The FTSE MIB, the primary benchmark index for Italian equity markets, and FTSE MTS, an

index for Italian government bonds with a maturity of one to three years, were used, and data on
these

indices

were

taken

from https://www.borsaitaliana.it/borsa/indici/indici-in-

continua/dettaglio.html?indexCode=FTSEMIB&lang=it

andhttps://it.investing.com/ind

ices/ftse-mts-italy-government-1-3y-chart, respectively.
4This

figureisfrom

Global

Age

Watch

Index

2015,

taken

from

https://www.helpage.org/global-agewatch/population-ageing-data/life-expectancy-at-60/
5

As for what sets positive savers apart from others, we compared the income and consumptionof positive savers and others and found that positive savers had both higher income and lower
consumption in both 2002 and 2014, but less so in 2014, when consumption levels werecomparable and income drove the result. These findings suggest that dissavers dissave partly
because they have lower incomes and partly because they have higher consumption and that it isrelatively affluent households that are saving, which is not surprising.
6

Niimi and Horioka (2019) distinguish between those intending to leave bequests for altruistic

reasons and those intending to leave bequests for strategic reasons, but the above conclusions areunchanged regardless of which type of bequest one refers to.

36