Wealth in three countries in more detail

Analysis on wealth shows that there is a big variation of wealth holdings across countries depending on the institutional and financial market settings. Based on inequality measures, it also shows that there is a large variation within countries. This section examines wealth holdings in three countries in more detail.  In particular, it compares age differences in wealth holdings and shows how these relate to homeownership. The three countries in question are two major European countries: Italy and Germany and, for comparison, the US. 

The focus is on the concept of net worth and its components.

The data come from three surveys: for Italy, the 2004 Survey of Household Income and Wealth; for Germany the 2007 Socio-Economic Panel (GSOEP) and for the US the 2007 Survey of Consumer Finances.

For cross-country analysis, values are expressed in terms of 2007 Euros in each case.[1]

Summary of findings

When comparing the level of wealth and its distribution it is important to keep in mind that the wealth portfolio and composition in a country is shaped by country specific preferences and its institutions (tax design, pension system etc.). The analysis shows that there are different tendencies in asset ownership and wealth levels by age group in the three different countries. What is common across countries is the fact the younger households have lower wealth compared to older households and that households most likely use this wealth during retirement to finance their consumption. An encouraging feature as regards those with low income is that many of them own their own home. What could be a concern is the fact that many households have outstanding debt secured by their home.  Further analysis could shed light on whether this debt is used to finance their current consumption or whether it is related to the purchase of their home.