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Emerging wealth disparities after the storm: Evidence from Spain

Author

Listed:
  • Catalina Amuedo-Dorantes

    (San Diego State University)

  • Cristina Borra

    (University of Seville)

Abstract

We examine how the recession that started in December 2007 in the United States impacted wealth accumulation and inequality among Spanish households. We find that overall wealth dropped by 15 percent between 2008 and 2011, with losses concentrating among households in the mid and top wealth quintiles. The most hard hit wealth components were business assets, primary home equity, and durable assets, which declined by 40 percent, 23 percent and 19 percent, respectively. Wealth losses among all households were likely sustained by restricted access to credit. Nonetheless, in part due to their more diversified wealth portfolios, households in the top wealth quintile amassed a greater share of the country’s wealth during the recession. Consequently, wealth inequality, which receded during the expansionary years of 2002 through 2005, rose by 2008 and continued its trend in 2011.

Suggested Citation

  • Catalina Amuedo-Dorantes & Cristina Borra, 2018. "Emerging wealth disparities after the storm: Evidence from Spain," Review of Economics of the Household, Springer, vol. 16(4), pages 1119-1149, December.
    • Handle: RePEc:kap:reveho:v:16:y:2018:i:4:d:10.1007_s11150-017-9363-3
    DOI: 10.1007/s11150-017-9363-3
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    Cited by:

    1. Carlos Gradín, 2021. "Inequality by Population Groups and Income Sources: Accounting for Inequality Changes in Spain During the Recession," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 67(2), pages 481-508, June.
    2. Dmitry Petrov & Marina Romaguera-de-la-Cruz, 2023. "Measuring economic insecurity with a joint income-wealth approach," Working Papers 637, ECINEQ, Society for the Study of Economic Inequality.
    3. P. Campoy-Muñoz & M. A. Cardenete & F. J. De Miguel-Vélez & J. Pérez-Mayo, 2022. "How does fiscal austerity impact on poverty and inequality? The Spanish case," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 39(3), pages 715-737, October.

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    More about this item

    Keywords

    Recessions; Downturns; Wealth; Wealth distribution; Inequality;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution

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