Is There Wealth Stability Across Generations in the U.S.? Evidence from Panel Study, 1984-2017

Contemporary Economic Policy (2022). https://onlinelibrary.wiley.com/doi/10.1111/coep.12581

44 Pages Posted: 17 Jun 2019 Last revised: 16 Aug 2022

See all articles by Jermaine Toney

Jermaine Toney

Rutgers University ; Cornell University

Date Written: June 21, 2022

Abstract

The net wealth accumulation of grandparents appears to be strongly determinative of the net wealth holdings of their adult grandchildren. While these general features are understood, few details are known about the persistence of wealth components that determine overall portfolio outcomes and their variance. I find that grandparental linkages in household portfolio components (risky assets, safe assets, non-financial assets) are strongly positively correlated with the asset components of the current generation. Meanwhile, I find that there is persistence in intergroup disparities in wealth components, accounting for the intergenerational transfers of wealth from grandparents and parents. My decompositions of net wealth into risky, safe, and non-financial assets illuminate different policy implications connected to total wealth accumulation and wealth inequality across younger households.

Keywords: stratification economics, intergenerational mobility, household portfolio allocations

JEL Classification: Z13, D31, D64, J15

Suggested Citation

Toney, Jermaine, Is There Wealth Stability Across Generations in the U.S.? Evidence from Panel Study, 1984-2017 (June 21, 2022). Contemporary Economic Policy (2022). https://onlinelibrary.wiley.com/doi/10.1111/coep.12581, Available at SSRN: https://ssrn.com/abstract=3373778 or http://dx.doi.org/10.2139/ssrn.3373778

Jermaine Toney (Contact Author)

Rutgers University ( email )

33 Livingston Avenue
New Brunswick, NJ 08901-1982

Cornell University

Warren Hall
Ithaca, NY 14853
United States

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