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Recent Trends in Wealth Ownership, 1983-1998

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  • Edward N. Wolff

Abstract

Using data from the Survey of Consumer Finances, I find that wealth inequality continued to rise in the United States after 1989, though at a reduced rate. The share of the wealthiest 1 percent of households rose by 3.6 percentage points from 1983 to 1989 and by another 0.7 percentage points from 1989 to 1998. Between 1983 and 1998, 53 percent of the total growth in net worth accrued to the top 1 percent of households and 91 percent to the top 20 percent. Another disturbing trend is that median net worth (in constant dollars), after growing by 7 percent from 1983 to 1989, increased by only another 4 percent by 1998. Indeed, the average wealth of the poorest 40 percent fell by 76 percent between 1983 and 1998 and by 1998 was only $1,100. Moreover, the financial resources accumulated by families in the bottom three income quintiles were very meager and dwindled between 1989 and 1998. The new figures also point to the growing indebtedness of the American family, with the overall debt-equity ratio climbing from 0.151 in 1983 to 0.176 in 1998. The ownership of investment assets was still highly concentrated in the hands of the rich in 1998. About 90 percent of the total value of stocks, bonds, trusts, and business equity were held by the top 10 percent. Despite the widening ownership of stock (48 percent of households owned stock shares either directly or indirectly in 1998), the richest 10 percent still accounted for 78 percent of their total value. With regard to racial and ethnic differences, the results show that over the period 1983 to 1998 non-Hispanic African-American households made some gains relative to whites in median net worth and home ownership but remained the same in terms of mean net worth. Hispanic households made significant gains on non-Hispanic white households in terms of mean net worth and home ownership but not in terms of median wealth.

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  • Edward N. Wolff, 2000. "Recent Trends in Wealth Ownership, 1983-1998," Economics Working Paper Archive wp_300, Levy Economics Institute.
  • Handle: RePEc:lev:wrkpap:wp_300
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    1. Hui Guo, 2001. "A simple model of limited stock market participation," Review, Federal Reserve Bank of St. Louis, vol. 83(May), pages 37-47.
    2. Andrea Brandolini & Luigi Cannari & Giovanni D’Alessio & Ivan Faiella, 2006. "Household Wealth Distribution in Italy in the 1990s," Chapters, in: Edward N. Wolff (ed.), International Perspectives on Household Wealth, chapter 7, Edward Elgar Publishing.
    3. John T. Addison & Paulino Teixeira & Katalin Evers & Lutz Bellmann, 2015. "Collective Bargaining and Innovation," Working Paper series 15-07, Rimini Centre for Economic Analysis.
    4. Giulio Fella & Giovanni Gallipoli, 2014. "Education and Crime over the Life Cycle," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 81(4), pages 1484-1517.
    5. Martha Starr, 2008. "Consumption, Work Hours, and Values in the Writings of John A. Ryan: Is it Possible to Return to the Road Not Taken?," Review of Social Economy, Taylor & Francis Journals, vol. 66(1), pages 7-24.
    6. Yann Algan & Xavier Ragot, 2010. "Monetary policy with Heterogeneous Agents and Borrowing Constraints," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 13(2), pages 295-316, April.
    7. Ronald L. Straight, 2002. "Wealth: Asset-Accumulation Differences by Race–SCF Data, 1995 and 1998," American Economic Review, American Economic Association, vol. 92(2), pages 330-334, May.
    8. Gianluca Violante & Giovanni Gallipoli & Costas Meghir, 2005. "Education Decisions, Equilibrium Policies and Wages Dispersion," 2005 Meeting Papers 522, Society for Economic Dynamics.
    9. Yann Algan & Xavier Ragot, 2010. "Monetary policy with Heterogeneous Agents and Borrowing Constraints," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 13(2), pages 295-316, April.
    10. Giulio Fella & Giovanni Gallipoli, 2014. "Education and Crime over the Life Cycle," Review of Economic Studies, Oxford University Press, vol. 81(4), pages 1484-1517.
    11. Zhan, Min, 2006. "Assets, parental expectations and involvement, and children's educational performance," Children and Youth Services Review, Elsevier, vol. 28(8), pages 961-975, August.
    12. Campbell III, Carl M., 2006. "A model of the determinants of effort," Economic Modelling, Elsevier, vol. 23(2), pages 215-237, March.
    13. Ronelle Burger & Frikkie Booysen & Servaas van der Berg & Michael von Maltitz, 2006. "Marketable Wealth in a Poor African Country: Using an index of consumer durables to investigate wealth accumulation by households in Ghana," WIDER Working Paper Series RP2006-138, World Institute for Development Economic Research (UNU-WIDER).
    14. repec:hal:spmain:info:hdl:2441/3ao9avev669hj9hvol1l0lr6im is not listed on IDEAS
    15. Bilbiie, Florin O., 2020. "The New Keynesian cross," Journal of Monetary Economics, Elsevier, vol. 114(C), pages 90-108.
    16. Kamal, Javed Bin, 2014. "Asset based poverty and wealth accumulation in low income households in Bangladesh," MPRA Paper 61528, University Library of Munich, Germany.

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