It is proposed to design and administer a wealth supplement to the 1989 wave to the Panel Study of Income Dynamics, to test life cycle and other models of saving, and to estimate the level and distribution of economic provision for retirement of successive cohorts as they retire over the next 30 years. The data will become part of the data set widely distributed by the Inter- University Consortium for Political and Social Research, and will be extensively used by the research community. In recent years, successive cohorts reaching retirement age have been increasingly better prepared, with more and more owning a home, having a private pension in addition to Social Security, and having other assets. But the baby boom generation faced less prosperous times, leaving some unemployed while others formed two-earner families with fewer children than previous generations. Aggregate personal saving has been extremely low in recent years, yet it is seen as important not only in providing for adequate retirements and economic security, but at the national level in providing the funding for investment necessary for productivity growth and international competitiveness. Hence understanding present saving patterns is crucial. The combination of two wealth measures five years apart (1984 and 1989), combined with some information about saving flows and the impact of family changes, promises to provide substantially better saving data than now exists. The analysis potential is considerable, since the saving data will be combined with 20-year annual records of earnings of both head and wife, family income, illnesses, unemployment, etc. A combination of conceptual and measurement problems makes it necessary to allow five years for savings to accumulate in order to be able to see behavior above the """"""""noise."""""""" There is evidence from comparisons of the 1984 PSID wealth data with data from two other national surveys that the PSID, with relatively few questions, elicited wealth data of remarkably high quality. Finally, the likely continuation of the PSID makes it possible to think of another measure in 1994, with different national events and changes in asset prices, so this proposal has a """"""""option value"""""""" in keeping open the possibility of three wealth measures spanning a decade.
