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Income and Wealth as Salient Gradational Aspects of Stratification

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  • David Brady

Abstract

This chapter argues income and wealth are two paramount gradational measures of social stratification. The chapter makes this case while reviewing recent social science on income and wealth. First, I begin by explaining how income and wealth are essential for purchasing well-being. Second, I review the definition and measurement of income and wealth. This section is particularly critical because one of my overarching themes is that measurement is absolutely essential to studying income and wealth. Unfortunately, the field of social stratification – especially within the U.S. – has arguably problematically neglected measurement. Along the way, I provide empirical evidence demonstrating that measurement critically influences estimates of levels of inequality, intergenerational mobility, proxies for permanent income, and levels and trends in racial inequality. Third, I describe the levels of inequality in income and wealth. Fourth, I describe the intergenerational inheritance of or mobility in income and wealth. Fifth, I show how income and wealth outperform other measures of social class as proxies of longer term resources, such as permanent income. Sixth, I demonstrate how income and wealth matter to stratification partly because they are mechanisms for other salient inequalities, including especially racial inequalities.

Suggested Citation

  • David Brady, 2022. "Income and Wealth as Salient Gradational Aspects of Stratification," LIS Working papers 845, LIS Cross-National Data Center in Luxembourg.
    • Handle: RePEc:lis:liswps:845
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    References listed on IDEAS

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    1. Philipp M. Lersch, 2017. "The Marriage Wealth Premium Revisited: Gender Disparities and Within-Individual Changes in Personal Wealth in Germany," Demography, Springer;Population Association of America (PAA), vol. 54(3), pages 961-983, June.
    2. Elvire Guillaud & Matthew Olckers & Michaël Zemmour, 2020. "Four Levers of Redistribution: The Impact of Tax and Transfer Systems on Inequality Reduction," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 66(2), pages 444-466, June.
    3. David Brady & Zachary Parolin, 2020. "The Levels and Trends in Deep and Extreme Poverty in the United States, 1993–2016," Demography, Springer;Population Association of America (PAA), vol. 57(6), pages 2337-2360, December.
    4. Robert Erikson & John H. Goldthorpe, 2002. "Intergenerational Inequality: A Sociological Perspective," Journal of Economic Perspectives, American Economic Association, vol. 16(3), pages 31-44, Summer.
    5. Joseph G. Altonji & Ulrich Doraszelski, 2005. "The Role of Permanent Income and Demographics in Black/White Differences in Wealth," Journal of Human Resources, University of Wisconsin Press, vol. 40(1).
    6. David Brady & Marco Giesselmann & Ulrich Kohler & Anke Radenacker, 2018. "How to measure and proxy permanent income: evidence from Germany and the U.S," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 16(3), pages 321-345, September.
    7. Brady, David & Guerra, Christian & Kohler, Ulrich & Link, Bruce, 2022. "The Long Arm of Prospective Childhood Income for Mature Adult Health in the United States," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 63(4), pages 543-559.
    8. McDonough, P. & Duncan, G.J. & Williams, D. & House, J., 1997. "Income dynamics and adult mortality in the United States, 1972 through 1989," American Journal of Public Health, American Public Health Association, vol. 87(9), pages 1476-1483.
    9. Lindsay Jacobs & Elizabeth Llanes & Kevin Moore & Jeffrey Thompson & Alice Henriques Volz, 2022. "Wealth concentration in the USA using an expanded measure of net worth [Top wealth shares in the UK over more than a century]," Oxford Economic Papers, Oxford University Press, vol. 74(3), pages 623-642.
    10. Raj Chetty & Nathaniel Hendren & Patrick Kline & Emmanuel Saez & Nicholas Turner, 2014. "Is the United States Still a Land of Opportunity? Recent Trends in Intergenerational Mobility," American Economic Review, American Economic Association, vol. 104(5), pages 141-147, May.
    11. Brady, David & Bostic, Amie, 2015. "Paradoxes of Social Policy: Welfare Transfers, Relative Poverty, and Redistribution Preferences," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 80(2), pages 268-298.
    12. Brady, David & Finnigan, Ryan & Kohler, Ulrich & Legewie, Joscha, 2020. "The Inheritance of Race Revisited: Childhood Wealth and Income and Black–White Disadvantages in Adult Life Chances," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 7, pages 599-627.
    13. Frick, Joachim R. & Jenkings, Stephen P. & Lillard, Dean R. & Lipps, Oliver & Wooden, Mark, 2007. "The Cross-National Equivalent File (CNEF) and Its Member Country Household Panel Studies," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 127(4), pages 627-654.
    14. Deadric T. Williams, 2019. "A Call to Focus on Racial Domination and Oppression: A Response to “Racial and Ethnic Inequality in Poverty and Affluence, 1959–2015″," Population Research and Policy Review, Springer;Southern Demographic Association (SDA), vol. 38(5), pages 655-663, October.
    15. Semyonov, Moshe & Lewin-Epstein, Noah & Maskileyson, Dina, 2013. "Where wealth matters more for health: The wealth–health gradient in 16 countries," Social Science & Medicine, Elsevier, vol. 81(C), pages 10-17.
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