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The concept and measurement of asset poverty: Levels, trends and composition for the U.S., 1983–2001

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  • Robert Haveman
  • Edward Wolff

Abstract

American prosperity in the second half of the 1980s together with the booming economy of the 1990s created the impression that American households have done well, particularly in terms of wealth acquisition. In this paper, we develop the concept of “asset poverty” as a measure of economic hardship, distinct from and complementary to the more commonly used concept of “income poverty.” We define a household with insufficient assets to enable it to meet basic needs (as measured by the income poverty line) for a period of three months to be asset poor. The results reveal that in the face of the large growth in overall assets in the U.S. and a fall in standard income poverty over the period from 1983 to 2001, the level of asset poverty increased from 22.4 to 24.5 percent. We also find that asset poverty rates for blacks and Hispanics are over twice those for whites; that asset poverty rates fall monotonically with both age and education; that they are much higher for renters than homeowners; and that by family type they range from a low of 5 percent for elderly couples to 71 percent for female single parents. Copyright Kluwer Academic Publishers 2004

Suggested Citation

  • Robert Haveman & Edward Wolff, 2004. "The concept and measurement of asset poverty: Levels, trends and composition for the U.S., 1983–2001," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 2(2), pages 145-169, August.
  • Handle: RePEc:kap:jecinq:v:2:y:2004:i:2:p:145-169
    DOI: 10.1007/s10888-004-4387-3
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    References listed on IDEAS

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    1. Conchita D’Ambrosio & Edward N. Wolff, 2006. "Is Wealth Becoming More Polarized in the United States?," Chapters,in: International Perspectives on Household Wealth, chapter 12 Edward Elgar Publishing.
    2. Donald L. Lerman & James J. Mikesell, 1988. "Impacts of Adding Net Worth to the Poverty Definition," Eastern Economic Journal, Eastern Economic Association, vol. 14(4), pages 357-370, Oct-Dec.
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    2. repec:taf:jdevst:v:52:y:2016:i:3:p:377-395 is not listed on IDEAS
    3. Scheidel, Arnim, 2013. "Flows, funds and the complexity of deprivation: Using concepts from ecological economics for the study of poverty," Ecological Economics, Elsevier, vol. 86(C), pages 28-36.
    4. repec:kap:jfamec:v:38:y:2017:i:4:d:10.1007_s10834-017-9531-x is not listed on IDEAS
    5. Yunhee Chang & Swarn Chatterjee & Jinhee Kim, 2014. "Household Finance and Food Insecurity," Journal of Family and Economic Issues, Springer, vol. 35(4), pages 499-515, December.
    6. Martina Menon & Federico Perali & Eva Sierminska, 2016. "An asset-based indicator of wellbeing for a unified means testing tool: Money metric or counting approach?," Working Papers 421, ECINEQ, Society for the Study of Economic Inequality.
    7. Bola Awotide & Arega Alene & Tahirou Abdoulaye & Victor Manyong, 2015. "Impact of agricultural technology adoption on asset ownership: the case of improved cassava varieties in Nigeria," Food Security: The Science, Sociology and Economics of Food Production and Access to Food, Springer;The International Society for Plant Pathology, vol. 7(6), pages 1239-1258, December.
    8. Andrea Brandolini, 2013. "Poverty," Chapters,in: Handbook on the Economics of Reciprocity and Social Enterprise, chapter 26, pages 261-270 Edward Elgar Publishing.
    9. Kuypers, Sarah & Marx, Ive, 2016. "Estimation of Joint Income?Wealth Poverty: A Sensitivity Analysis," IZA Discussion Papers 10391, Institute for the Study of Labor (IZA).
    10. Andrea Brandolini & Silvia Magri & Timothy M. Smeeding, 2010. "Asset-based measurement of poverty," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 29(2), pages 267-284.
    11. Leah Gjertson, 2016. "Emergency Saving and Household Hardship," Journal of Family and Economic Issues, Springer, vol. 37(1), pages 1-17, March.
    12. Müller, Philip & Schmidt, Tobias, 2015. "Identifying income and wealth-poor households in the euro area," Discussion Papers 35/2015, Deutsche Bundesbank.
    13. Torche, Florencia & Spilerman, Seymour, 2006. "Household Wealth in Latin America," WIDER Working Paper Series 114, World Institute for Development Economic Research (UNU-WIDER).
    14. Elliott, William, 2013. "The effects of economic instability on children's educational outcomes," Children and Youth Services Review, Elsevier, vol. 35(3), pages 461-471.
    15. Timothy Smeeding & Eva Sierminska & Andrea Brandolini, 2006. "Cross National Comparison of Income and Wealth Status in Retirement: First Results from the Luxembourg Wealth Study (LWS)," LWS Working papers 2, LIS Cross-National Data Center in Luxembourg.
    16. Conchita D'Ambrosio & Nicholas Rohde, 2014. "The Distribution of Economic Insecurity: Italy and the U.S. over the Great Recession," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 60(S1), pages 33-52, May.
    17. Martina Menon & Federico Perali & Eva Sierminska, 2017. "An Efficiency Comparison of Means Testing Tools: Money Metric or Counting Approach?," CHILD Working Papers Series 57 JEL Classification: D1, Centre for Household, Income, Labour and Demographic Economics (CHILD) - CCA.
    18. Andrea Brandolini & Eva Sierminska & Janet Gornick & Teresa Munzi & Timothy Smeeding, 2006. "Older Women’s Income and Wealth Packages: The Five-Legged Stool in Cross-National Perspective," LWS Working papers 3, LIS Cross-National Data Center in Luxembourg.
    19. Muntaha Rakib & Julia Anna Matz, 2016. "The Impact of Shocks on Gender-differentiated Asset Dynamics in Bangladesh," Journal of Development Studies, Taylor & Francis Journals, vol. 52(3), pages 377-395, March.
    20. Frank A. Cowell & Philippe Kerm, 2015. "Wealth Inequality: A Survey," Journal of Economic Surveys, Wiley Blackwell, vol. 29(4), pages 671-710, September.
    21. Irina Grafova, 2011. "Financial Strain and Smoking," Journal of Family and Economic Issues, Springer, vol. 32(2), pages 327-340, June.
    22. Lewis, Melinda & Cramer, Reid & Elliott, William & Sprague, Aleta, 2014. "Policies to promote economic stability, asset building, and child development," Children and Youth Services Review, Elsevier, vol. 36(C), pages 15-21.
    23. repec:spr:soinre:v:136:y:2018:i:1:d:10.1007_s11205-016-1529-5 is not listed on IDEAS

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    Keywords

    demographics; poverty; wealth;

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