Changing Wealth Accumulation Patterns: Evidence and Determinants

Gale, William G.; Harris, Benjamin

doi:10.2139/ssrn.3557907

Cited by 2 publications

(4 citation statements)

References 27 publications

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“…Immigration is a complex issue. While most immigrants have significantly lower wealth, controlling for household and life cycle characteristics, than the native-born population, they also exhibit higher rates of innovation 52 See Gale and Harris (2020). 53 .…”

Section: Discussionmentioning

confidence: 99%

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The Wealth of Generations, With Special Attention to the Millennials

Gale¹,

Gelfond²,

Fichtner³

et al. 2020

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We examine household wealth across birth cohorts and over time using data from the Survey of Consumer Finances. We show that although the Great Recession reduced wealth in every age group, longer-term trends indicate that the wealth of older age groups has increased while the wealth of younger age groups has declined. A substantial share of these changes, in both directions, can be explained by changes in household demographic and economic characteristics. As for the millennial generation, their median wealth in 2016 was lower than the wealth of any similarly aged cohort between 1989 and 2007. Millennials will have several advantages in wealth accumulation relative to previous generations, such as more education and longer working lives, but also several disadvantages, including weak prospects for economic growth and delays in home purchase and marriage. The millennial generation contains a significantly higher percentage of minorities than previous generations. We estimate that minority households have tended to accumulate less wealth than whites in the past, controlling for household characteristics, and the difference appears to be growing over time for Blacks relative to whites. These results apply to the period before the COVID-19 pandemic and are best interpreted as addressing generational wealth patterns through 2016 and providing a pre-COVID benchmark against which future studies can be compared.

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Section: Discussionmentioning

confidence: 99%

“…Immigration is a complex issue. While most immigrants have significantly lower wealth, controlling for household and life 52 See Gale and Harris (2020). 53 Gale et al (2019).…”

Section: Discussionmentioning

confidence: 99%

The Wealth of Generations, With Special Attention to the Millennials

Gale¹,

Gelfond²,

Fichtner³

et al. 2020

Self Cite

View full text Add to dashboard Cite

show abstract

“…More generally, our results suggest that wealth accumulation paths may be becoming more delayed over the life cycle. 52 Younger generations are attaining more education, which takes time, 52 See Gale and Harris (2020).…”

Section: Discussionmentioning

confidence: 99%

“…Documenting and determining the causes of changes in the level and distribution of household wealth and its components across generations and over time is an extraordinarily ambitious goal. This paper takes several initial steps in that general direction, building on Gale and Pence (2006), Gale, Gelfond, and Fichtner (2019) and Gale and Harris (2020) and using data from the 1989 to 2016 waves of the Federal Reserve Board's Survey of Consumer Finances (SCF). We obtain several key results.…”

Section: Introductionmentioning

confidence: 99%