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Recent Trends in Household Wealth in the United States: Rising Debt and the Middle-Class Squeeze

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  • Edward N. Wolff

Abstract

I find here that the early 2000s witnessed both exploding debt and the middle-class squeeze. While median wealth grew briskly in the late 1990s, it fell slightly between 2001 and 2004, while the inequality of net worth increased slightly. Indebtedness, which fell substantially during the late 1990s, skyrocketed in the early 2000s. Among the middle class, the debt-to-income ratio reached its highest level in 20 years. The concentration of investment-type assets generally remained as high in 2004 as during the previous two decades. The racial and ethnic disparity in wealth holdings, after stabilizing during most of the 1990s, widened in the years between 1998 and 2001, but then narrowed during the early 2000s. Wealth also shifted in relative terms, away from young households (particularly those under age 35) and toward those in the 55–64 age group.

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  • Edward N. Wolff, 2007. "Recent Trends in Household Wealth in the United States: Rising Debt and the Middle-Class Squeeze," Economics Working Paper Archive wp_502, Levy Economics Institute.
  • Handle: RePEc:lev:wrkpap:wp_502
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    References listed on IDEAS

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    1. Francine D. Blau & John W. Graham, 1990. "Black-White Differences in Wealth and Asset Composition," The Quarterly Journal of Economics, Oxford University Press, vol. 105(2), pages 321-339.
    2. Edward N. Wolff, 1998. "Recent Trends in the Size Distribution of Household Wealth," Journal of Economic Perspectives, American Economic Association, vol. 12(3), pages 131-150, Summer.
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    Cited by:

    1. Guido Cozzi & Fabio Privileggi, 2009. "The fractal nature of inequality in a fast growing world: new version," Working Papers 2009_30, Business School - Economics, University of Glasgow.
    2. Sebastian Leitner, 2015. "Drivers of wealth inequality in euro area countries," Working Paper Reihe der AK Wien - Materialien zu Wirtschaft und Gesellschaft 137, Kammer für Arbeiter und Angestellte für Wien, Abteilung Wirtschaftswissenschaft und Statistik.
    3. Yann Algan & Xavier Ragot, 2010. "Monetary policy with Heterogeneous Agents and Borrowing Constraints," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 13(2), pages 295-316, April.
    4. Ravi Jagannathan & Mudit Kapoor & Ernst Schaumburg, 2009. "Causes of the Great Recession of 2007-9: The Financial Crisis is the Symptom not the Disease!," NBER Working Papers 15404, National Bureau of Economic Research, Inc.
    5. Jagannathan, Ravi & Kapoor, Mudit & Schaumburg, Ernst, 2013. "Causes of the great recession of 2007–2009: The financial crisis was the symptom not the disease!," Journal of Financial Intermediation, Elsevier, vol. 22(1), pages 4-29.
    6. Edward Wolff & Maury Gittleman, 2014. "Inheritances and the distribution of wealth or whatever happened to the great inheritance boom?," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 12(4), pages 439-468, December.
    7. Jonathan Vespa & Matthew Painter, 2011. "Cohabitation History, Marriage, and Wealth Accumulation," Demography, Springer;Population Association of America (PAA), vol. 48(3), pages 983-1004, August.
    8. Lee, Sang Yoon Tim, 2012. "Entrepreneurs, Managers and Inequality," Working Papers 12-15, University of Mannheim, Department of Economics.

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