Ponds and streams: wealth and income in the U.S., 1989 to 2007
AbstractMuch discussion treats the working definitions of wealth and income as if they were self-evident, but definitional choices can make substantial differences in the overall picture. To provide a clear basis on which to examine family wealth and income their interrelationship, this paper begins with a basic discussion of a range of possible measures of those concepts. Using the measures developed, the paper examines the distributions of wealth and income and their joint properties using data from the 1989–2007 waves of the Survey of Consumer Finances (SCF). Among other things, the data show a complicated pattern of shifts in the wealth distribution, with clear gains across the broad middle and at the top. For income, there is a more straightforward picture of rising inequality. Over this period, wealth as a fraction of income moved up across both the distributions of wealth and income. Nonetheless, their joint copula distributions (a type of distribution with uniform margins) do not show noticeable changes over this time. The consistent pattern is that very high wealth and income and very low wealth and income go together, but in between these poles, the relationship is fairly diffuse. The paper also presents information on the composition of wealth and income over the 18-year period; the general patterns of holdings across the distributions did not change markedly, but there were some important shifts. For wealth, debt increased as a share of assets across the wealth distribution, the share of principal residences rose mainly below the median of net worth, the share of tax-deferred retirement accounts rose and the share of other financial assets declined. For income, the clearest change was a general decline in the relative importance of capital income other than that from businesses.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Board of Governors of the Federal Reserve System (U.S.) in its series Finance and Economics Discussion Series with number 2009-13.
Date of creation: 2009
Date of revision:
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-04-05 (All new papers)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Dew-Becker, Ian & Gordon, Robert J, 2008.
"Controversies about the Rise in American Inequality: A Survey,"
CEPR Discussion Papers
6817, C.E.P.R. Discussion Papers.
- Robert J. Gordon & Ian Dew-Becker, 2008. "Controversies about the Rise of American Inequality: A Survey," NBER Working Papers 13982, National Bureau of Economic Research, Inc.
- Arthur B. Kennickell & Annika E. Sunden, 1997. "Pensions, social security, and the distribution of wealth," Finance and Economics Discussion Series 1997-55, Board of Governors of the Federal Reserve System (U.S.).
- Erik Hurst & James P. Ziliak, 2006.
"Do Welfare Asset Limits Affect Household Saving?: Evidence from Welfare Reform,"
Journal of Human Resources,
University of Wisconsin Press, vol. 41(1).
- Erik Hurst & James P. Ziliak, 2004. "Do Welfare Asset Limits Affect Household Saving? Evidence from Welfare Reform," NBER Working Papers 10487, National Bureau of Economic Research, Inc.
- Wolff, Edward N., 2007. "The retirement wealth of the baby boom generation," Journal of Monetary Economics, Elsevier, vol. 54(1), pages 1-40, January.
- Lee, Sang Yoon Tim, 2012. "Entrepreneurs, Managers and Inequality," Working Papers 12-15, University of Mannheim, Department of Economics.
- Matthias Kredler & Daniel Barczyk, 2012. "Inequality and Asset Prices," 2012 Meeting Papers 929, Society for Economic Dynamics.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Kris Vajs).
If references are entirely missing, you can add them using this form.