Health, Education, and the Postretirement Evolution of Household Assets

Abstract

We explore the relationship between education and the evolution of wealth after retirement. Asset growth following retirement depends in part on health capital and financial capital accumulated prior to retirement, which in turn are strongly related to educational attainment. These “initial conditions” at retirement can have a lingering effect on subsequent asset evolution. We aim to disentangle the effects of education that operate through health and financial pathways prior to retirement from the effects of education that impinge directly on asset evolution after retirement. We find a substantial effect of education on asset growth through each of the pathways.