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Working Paper
Changes in the Distribution of After-Tax Wealth: Has Income Tax Policy Increased Wealth Inequality?
A substantial share of the wealth of Americans is held in tax-deferred form such as in retirement accounts or as unrealized capital gains. Most data and statistics on assets and wealth is reported on a pre-tax basis, but pre-tax values include an implicit tax liability and may not provide as accurate a measure of the financial position or material well-being of families. In this paper, we describe the distribution of tax-deferred assets in the SCF from 1989 to 2013, provide new estimates of the income tax liabilities implicit in those assets, and present new statistics on the level and ...
Working Paper
Wealth, Pensions, Debt, and Savings: Considerations for a Panel Survey
Several U.S. panel surveys measure household wealth. At the same time, many important questions about household wealth accumulation remain somewhat unresolved. We consider whether measurement error on the existing suite of longitudinal surveys hinders their usefulness for addressing these questions. We review the features of wealth data that make it difficult to collect and assess which assets and debts households are more likely to report accurately. We suggest several considerations in choosing between improving existing surveys and starting a new one.
Newsletter
Neighborhood Redlining, Racial Segregation, and Homeownership
Redlining was the practice of selectively classifying neighborhoods as most likely to default on repayment of a mortgage loan. Houses in redlined neighborhoods held little value as collateral, and lenders would only offer mortgage loans for these houses at above-average interest rates. Over time, these neighborhoods had the largest concentrations of African Americans. The September 2021 issue of Page One Economics explains how residents in redlined neighborhoods could not afford to become homeowners and accumulate wealth at the rates other groups did. It also points out how only when the ...
Journal Article
New Data on Wealth Mobility and Their Impact on Models of Inequality
Using data on families? wealth over time, we calculate changes in relative wealth mobility; that is, how likely families are to move up or down the wealth distribution, relative to one another. We find families have become less likely to change their position in the wealth distribution over time, and those that do move are less likely to go very far. We also look at the savings behaviors that are associated with more mobile families and find that families that make large movements through the wealth distribution appear to be more likely to own some form of a risky asset.
How Financially Fit Are American Retirees?
From 1989 to 2016, the wealth of retired households increased in real terms. But data also indicated that wealth inequality worsened among retirees.
Discussion Paper
Racial and Ethnic Wealth Inequality in the Post-Pandemic Era
Wealth is unevenly distributed across racial and ethnic groups in the United States. In this first post in a two-part series on wealth inequality, we use the Distributional Financial Accounts (DFA) to document these disparities between Black, Hispanic, and white households from the first quarter of 2019 to the third quarter of 2023 for wealth and a variety of asset and liability categories. We find that these disparities have been exacerbated since the pandemic, likely due to rapid growth in the financial assets more often held by white individuals.
Discussion Paper
Wealth Inequality by Age in the Post‑Pandemic Era
Following our post on racial and ethnic wealth gaps, here we turn to the distribution of wealth across age groups, focusing on how the picture has changed since the beginning of the pandemic. As of 2019, individuals under 40 years old held just 4.9 percent of total U.S. wealth despite comprising 37 percent of the adult population. Conversely, individuals over age 54 made up a similar share of the population and held 71.6 percent of total wealth. Since 2019, we find a slight narrowing of these wealth disparities across age groups, likely driven by expanded ownership of financial assets among ...
Millennials Are Catching Up in Terms of Generational Wealth
From 2016 to 2019, millennials born in the 1980s became relatively wealthier, though they still lagged in relation to wealth expectations.
Newsletter
Examining Racial Wealth Inequality
The March 2022 issue of Page One Economics covers the topics of income and wealth through the lens of racial inequality. Learn the difference between income and wealth, how the racial wealth gap has endured over time, and the reasons that certain groups have been limited in their wealth-building potential.
Discussion Paper
Recent Disparities in Earnings and Employment
The New York Fed recently released its latest set of Equitable Growth Indicators (EGIs). Updated quarterly, the EGIs continue to report demographic and geographic differences in inflation, earnings (real and nominal), employment, and consumer spending (real and nominal) at the national level. This release also launches a set of national wealth EGIs (which will be examined more closely on Liberty Street Economics early next year). Going forward, EGI releases will also include a set of regional EGIs, which will present disparities in inflation, earnings (real and nominal), employment, and ...