Household wealth dynamics by age and generation in France and the euro area.

Summary Demographic ageing, the joint consequence of declining fertility and longer life expectancy, is likely to influence household savings behaviour upstream, particularly in a context of reform of the public pension system and a policy of "activating" individuals. Moreover, the wealth of an aging population will have a particular structure, probably less focused on risky assets. An underlying question then concerns the availability of this wealth to finance the economy: this is the meaning of the reform sought by the recent Pacte law, aiming in particular to direct retirement savings towards equity products (shares) rather than interest rate products (euro funds). It is therefore worth studying how the level and structure of wealth differ according to the age and generation of households. Insofar as these choices are also likely to depend on the institutional environment (pension system in particular) and the tax corpus, concerning capital gains, financial products and also inheritance, it is important to place this reflection in an international context. This paper focuses on France, but proposes comparisons with the main European economies. The data show that the distribution of wealth, both total and financial, has been distorted over the past 30 years to the benefit of the older generations. Moreover, since 2008, the structure of French savings has become more and more cautious, less and less oriented towards risky assets. From a macroeconomic point of view, these elements call for a better allocation of individual savings towards products that are more likely to finance the economy, one of the objectives of the recent Pact law.