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Wealth Disparities Before and After the Great Recession

Author

Listed:
  • Fabian T. Pfeffer
  • Sheldon Danziger
  • Robert F. Schoeni

Abstract

The collapse of the labor, housing, and stock markets beginning in 2007 created unprecedented challenges for American families. This study examines disparities in wealth holdings leading up to the Great Recession and during the first years of the recovery. All socioeconomic groups experienced declines in wealth following the recession, with higher wealth families experiencing larger absolute declines. In percentage terms, however, the declines were greater for less advantaged groups as measured by minority status, education, and prerecession income and wealth, leading to a substantial rise in wealth inequality in just a few years. Despite large changes in wealth, longitudinal analyses demonstrate little change in mobility in the ranking of particular families in the wealth distribution. Between 2007 and 2011, one-fourth of American families lost at least 75 percent of their wealth, and more than half of all families lost at least 25 percent of their wealth. Multivariate longitudinal analyses document that these large relative losses were disproportionally concentrated among lower-income, less educated, and minority households.

Suggested Citation

  • Fabian T. Pfeffer & Sheldon Danziger & Robert F. Schoeni, 2013. "Wealth Disparities Before and After the Great Recession," The ANNALS of the American Academy of Political and Social Science, , vol. 650(1), pages 98-123, November.
    • Handle: RePEc:sae:anname:v:650:y:2013:i:1:p:98-123
    DOI: 10.1177/0002716213497452
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    References listed on IDEAS

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    2. Shiqi Jiang & Lingli Qi & Xinyue Lin, 2022. "The Impacts of COVID-19 Shock on Intergenerational Income Mobility: Evidence from China," IJERPH, MDPI, vol. 19(18), pages 1-20, September.
    3. Dorina Cadar & Laura Brocklebank & Li Yan & Yaohui Zhao & Andrew Steptoe & James M Raymo, 2023. "Socioeconomic and Contextual Differentials in Memory Decline: A Cross-Country Investigation Between England and China," The Journals of Gerontology: Series B, The Gerontological Society of America, vol. 78(3), pages 544-555.
    4. Filip Chybalski, 2022. "Intergenerational income distribution before and after the great recession: winners and losers," DECISION: Official Journal of the Indian Institute of Management Calcutta, Springer;Indian Institute of Management Calcutta, vol. 49(3), pages 311-327, September.
    5. Ian P. McManus, 2024. "Workforce automation risks across race and gender in the United States," American Journal of Economics and Sociology, Wiley Blackwell, vol. 83(2), pages 463-492, March.
    6. David M. Cutler & Noémie Sportiche, 2022. "Economic Crises and Mental Health: Effects of the Great Recession on Older Americans," NBER Working Papers 29817, National Bureau of Economic Research, Inc.
    7. Schäfer, Dorothea & Stephan, Andreas & Weser, Henriette, 2023. "Crisis stress for the diversity of financial portfolios — evidence from European households," International Review of Economics & Finance, Elsevier, vol. 83(C), pages 330-347.
    8. Jermaine Toney, 2022. "Is there wealth stability across generations in the U.S.? Evidence from panel study, 1984–2017," Contemporary Economic Policy, Western Economic Association International, vol. 40(4), pages 551-567, October.
    9. María Alonso-Ferres & Ginés Navarro-Carrillo & Marta Garrido-Macías & Eva Moreno-Bella & Inmaculada Valor-Segura, 2020. "Connecting perceived economic threat and prosocial tendencies: The explanatory role of empathic concern," PLOS ONE, Public Library of Science, vol. 15(5), pages 1-25, May.
    10. Tran, My & Gannon, Brenda & Rose, Christiern, 2023. "The effect of housing wealth on older adults’ health care utilization: Evidence from fluctuations in the U.S. housing market," Journal of Health Economics, Elsevier, vol. 88(C).

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    Keywords

    wealth; assets; inequality; income; race;
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