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Research Article
Open Access

Household Wealth Trends in the United States, 1962 to 2013: What Happened over the Great Recession?

Edward N. Wolff
RSF: The Russell Sage Foundation Journal of the Social Sciences October 2016, 2 (6) 24-43; DOI: https://doi.org/10.7758/RSF.2016.2.6.02
Edward N. Wolff
aProfessor of economics at New York University, research associate at the National Bureau of Economic Research, and editorial board member of the and the
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Abstract

I look at wealth trends from 1962 to 2013, particularly for the middle class. Asset prices plunged between 2007 and 2010 but then rebounded from 2010 to 2013. The most telling finding is that median wealth plummeted by 44 percent between 2007 and 2010, almost double the drop in housing prices. Wealth inequality, after almost two decades of little movement, was up sharply from 2007 to 2010. This sharp fall in median net worth and rise in overall wealth inequality are traceable primarily to the high leverage of middle-class families, the high share of homes in their portfolio, and the plunge in house prices. Rather remarkably, median (and mean) wealth did not essentially change from 2010 to 2013 despite the rebound in asset prices. The proximate cause was the high dissavings of the middle class. Wealth inequality also remained largely unchanged.

  • household wealth
  • inequality
  • portfolio composition
  • Copyright © 2016 by Russell Sage Foundation. All rights reserved. Printed in the United States of America. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Reproduction by the United States Government in whole or in part is permitted for any purpose. I would like to express my appreciation to the Institute of New Economic Thinking (INET) for financial support. Direct correspondence to: Edward N. Wolff at ew1{at}nyu.edu, Department of Economics, New York University, 19 West 4th Street, New York, NY 10012.

Open Access Policy: RSF: The Russell Sage Foundation Journal of the Social Sciences is an open access journal. This article is published under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Unported License.

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RSF: The Russell Sage Foundation Journal of the Social Sciences: 2 (6)
RSF: The Russell Sage Foundation Journal of the Social Sciences
Vol. 2, Issue 6
1 Oct 2016
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Household Wealth Trends in the United States, 1962 to 2013: What Happened over the Great Recession?
Edward N. Wolff
RSF: The Russell Sage Foundation Journal of the Social Sciences Oct 2016, 2 (6) 24-43; DOI: 10.7758/RSF.2016.2.6.02

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Household Wealth Trends in the United States, 1962 to 2013: What Happened over the Great Recession?
Edward N. Wolff
RSF: The Russell Sage Foundation Journal of the Social Sciences Oct 2016, 2 (6) 24-43; DOI: 10.7758/RSF.2016.2.6.02
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  • Article
    • Abstract
    • HISTORICAL BACKGROUND
    • DATA SOURCES AND METHODS
    • MEDIAN WEALTH PLUMMETS OVER THE GREAT RECESSION
    • WEALTH INEQUALITY JUMPS IN THE LATE 2000S
    • HOUSEHOLD DEBT FINALLY RECEDES
    • THE ROLE OF LEVERAGE IN EXPLAINING WEALTH TRENDS
    • CONCLUDING REMARKS
    • Acknowledgments
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  • household wealth
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