Recent trends in household wealth in the U.S. Rising debt and the middle class squeeze

Edward N. Wolff

    Research output: Chapter in Book/Report/Conference proceedingChapter

    Abstract

    I find here that the early and mid 2000s (2001 to 2007) witnessed both exploding debt and a consequent -middle class squeeze." Median wealth grew briskly in the late 1990s and even faster in the 2000s. The inequality of net worth was up slightly during the 2000s. Indebtedness, which fell substantially during the late 1990s, skyrocketed in the early and mid 2000s. Among the middle class, the debt-income ratio reached its highest level in 24 years. The concentration of investment type assets generally remained as high in 2007 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 and mid 2000s. Wealth also shifted in relative terms away from young households (particularly under age 45) and toward those in age group 55 to 74. Projections to July 2009 on the basis of changes in stock and housing prices indicate that median wealth plunged by 36 percent and there was a fairly steep rise in wealth inequality, with the Gini coefficient advancing from 0.834 to 0.865.

    Original languageEnglish (US)
    Title of host publicationEconomics of Wealth in the 21st Century
    PublisherNova Science Publishers, Inc.
    Pages1-41
    Number of pages41
    ISBN (Print)9781611228052
    StatePublished - Feb 2011

    Keywords

    • Household wealth
    • Inequality
    • Portfolio composition
    • Racial inequality

    ASJC Scopus subject areas

    • Economics, Econometrics and Finance(all)
    • Social Sciences(all)

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