Drowning or Weathering the Storm? Changes in Family Finances from 2007 to 2009

32 Pages Posted: 2 May 2011 Last revised: 15 May 2011

See all articles by Jesse Bricker

Jesse Bricker

Board of Governors of the Federal Reserve System

Brian Bucks

Consumer Financial Protection Bureau

Arthur B. Kennickell

Federal Reserve Board - Department of Research & Statistics

Traci Mach

Board of Governors of the Federal Reserve System

Kevin B. Moore

Board of Governors of the Federal Reserve System

Date Written: April 2011

Abstract

In 2009, the Federal Reserve Board implemented a survey of families that participated in the 2007 Survey of Consumer Finances (SCF) to gain detailed information on the effects of the recent recession on all types of households. Using data from the 2007-09 SCF panel, we highlight the variation in households' financial experiences by examining the distribution of changes in families' balance sheets. Further, we use information on changes in families' saving, investing, and spending behavior to consider the potential longer-term consequences of the current recession on households' finances and decisions.Most families experienced a decline in wealth between 2007 and 2009, but many families saw only small changes on net, and others saw substantial increases in their wealth. This pattern of gains and losses typically holds within demographic groups. Changes in families' wealth over the period appear to reflect changes in asset values (particularly the value of homes, stocks, and businesses) rather than changes in the level of ownership of assets and debts or in the amount of debt held. On the whole, families appear more cautious in 2009 than in 2007, as most families reported greater desired buffer savings, and many expressed concern over future income and employment.

Suggested Citation

Bricker, Jesse and Bucks, Brian and Kennickell, Arthur B. and Mach, Traci and Moore, Kevin B., Drowning or Weathering the Storm? Changes in Family Finances from 2007 to 2009 (April 2011). NBER Working Paper No. w16985. Available at SSRN: https://ssrn.com/abstract=1825767

Jesse Bricker (Contact Author)

Board of Governors of the Federal Reserve System ( email )

20th Street and Constitution Avenue NW
Washington, DC 20551
United States

Brian Bucks

Consumer Financial Protection Bureau ( email )

United States

Arthur B. Kennickell

Federal Reserve Board - Department of Research & Statistics ( email )

20th & C. St., N.W.
Washington, DC 20551
United States
202-452-2247 (Phone)
202-452-5295 (Fax)

Traci Mach

Board of Governors of the Federal Reserve System ( email )

20th Street and Constitution Avenue NW
Washington, DC 20551
United States

Kevin B. Moore

Board of Governors of the Federal Reserve System ( email )

20th Street and Constitution Avenue NW
Washington, DC 20551
United States

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