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Household Wealth Trends in the United States, 1962 to 2016: Has Middle Class Wealth Recovered?

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  • Edward N. Wolff

Abstract

Asset prices plunged between 2007 and 2010 but then rebounded from 2010 to 2016. The most telling finding is that median wealth plummeted by 44 percent over years 2007 to 2010. The inequality of net worth, after almost two decades of little movement, went up sharply from 2007 to 2010, and relative indebtedness for the middle class expanded. The sharp fall in median net worth and the rise in overall wealth inequality over these years are largely traceable to the high leverage of middle class families and the high share of homes in their portfolio. Mean and median wealth rebounded from 2010 to 2016, by 17 and 28 percent, respectively. While mean wealth surpassed its previous peak in 2007, median wealth was still down by 34 percent. More than 100 percent of the recovery in both was due to a high return on wealth but this factor was offset by negative savings. Relative indebtedness continued to fall for the middle class from 2010 to 2016, and wealth inequality increased somewhat. The racial and ethnic disparity in wealth holdings widened considerably between 2007 and 2016, and the wealth of households under age 45 declined in relative terms.

Suggested Citation

  • Edward N. Wolff, 2017. "Household Wealth Trends in the United States, 1962 to 2016: Has Middle Class Wealth Recovered?," NBER Working Papers 24085, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:24085
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    References listed on IDEAS

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    1. Emmanuel Saez & Gabriel Zucman, 2016. "Editor's Choice Wealth Inequality in the United States since 1913: Evidence from Capitalized Income Tax Data," The Quarterly Journal of Economics, Oxford University Press, vol. 131(2), pages 519-578.
    2. Edward N Wolff, 1999. "Wealth Accumulation by Age Cohort in the U.S., 1962–1992: The Role of Savings, Capital Gains and Intergenerational Transfers," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 24(1), pages 27-49, January.
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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. On the Distribution of Wealth
      by Steve Cecchetti and Kim Schoenholtz in Money, Banking and Financial Markets on 2018-04-16 11:56:16
    2. Assessing Housing Risk
      by Steve Cecchetti and Kim Schoenholtz in Money, Banking and Financial Markets on 2018-10-15 11:28:50

    More about this item

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination

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