Population ageing, household portfolios and financial asset returns: A survey of the literature

Population ageing is a recognised phenomenon affecting many countries in the world including most EU ones, Japan and US. The financial implications of this phenomenon can be manifold and some recent literature has focused in particular on the possible consequences of ageing on household portfolios and on main financial asset returns ones. Overall, the extant literature on household portfolios reports a significant effect of age on asset allocation, thereby providing evidence in favour of the standard life-cycle hypothesis. On the other hand, empirical results on the link between demographics and financial asset prices/returns are less uniform. The aim of this paper is to systematize the extant literature on these issues and to provide an overview of the main results reported so far, trying to evaluate whether the different conclusions reached depend on the approach taken in the empirical exercises rather than on the actual differences, in terms of demographic dynamics, public pension systems and financial markets, of the realities considered.