Population age structure and household portfolio choices in Italy

Based on the exceptional ageing of the Italian population, this paper aims to contribute to the current debate on population ageing and financial markets. To this end, we use data taken by the Bank of Italy Survey of Household Income and Wealth (SHIW) over the over the period 1995 – 2006 and we analyse the average household portfolios in relation to age and net wealth. Our analysis rests on a clustering of assets according to risk which is different from the one used in Guiso and Jappelli (2002). We find that age has affected financial choices of Italian households over the whole decade, but the portfolio age profile has significantly evolved over time with important differences across wealth quartiles. Overall our analysis highlights a tendency toward a hump-shaped age profile of the allocation in risky assets for most net wealth levels.