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Personal Taxation, Pension Wealth, and Portfolio Composition

R. Glenn Hubbard

The Review of Economics and Statistics 1985

This paper emphasizes the roles played by personal taxation and pension wealth in portfolio choice and composition. A theoretical discussion of the impacts of taxation and participation in social security and private pension systems on individual wealth allocation is followed by empirical evidence based on U.S. cross-section data. Both effects prove to be significant. Anticipated social security and private pension benefits exert a measurable influence on household portfolio allocation. Their omission from an asset demand model may lead to a misinterpretation of the impact of taxation on portfolio composition.

DOI
10.2307/1928434
Volume
67 (1)
Pages
53
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