Trends in Household Portfolio Composition

Posted: 27 Nov 2019

See all articles by Jesse Bricker

Jesse Bricker

Board of Governors of the Federal Reserve System

Kevin B. Moore

Board of Governors of the Federal Reserve System

Jeffrey P. Thompson

New England Public Policy Institute, Federal Reserve Bank of Boston; Federal Reserve Board of Governors

Multiple version iconThere are 2 versions of this paper

Date Written: 2019-09-01

Abstract

We use data from the Federal Reserve Board's Survey of Consumer Finances (SCF) to explore how household asset portfolios in the United States evolved between 1989 and 2016. Throughout this period, two key assets -- housing and financial market assets -- drove the household balance sheet evolution; however, we find a great heterogeneity in the balance sheets that averages and aggregates conceal. We observe that ownership of assets has become more concentrated over time, and we show that nearly all of the time series variation in financial vulnerabilities in family balance sheets is due to middle-income families, who hold most of their assets in housing and are often the most highly leveraged income group in the housing market. Tracking the evolution of wealth over time among birth-year cohorts, we observe the standard life-cycle asset accumulation processes among low-, middle-, and high-income families.

Keywords: portfolio composition, asset inequality, life-cycle savings patterns, financial risk

JEL Classification: D14, D31, E21, E22, G11, G51

Suggested Citation

Bricker, Jesse and Moore, Kevin B. and Thompson, Jeffrey P., Trends in Household Portfolio Composition (2019-09-01). FRB of Boston Working Paper No. 19-9. Available at SSRN: https://ssrn.com/abstract=3494188 or http://dx.doi.org/10.29412/res.wp.2019.09

Jesse Bricker (Contact Author)

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

Jeffrey P. Thompson

New England Public Policy Institute, Federal Reserve Bank of Boston ( email )

600 Atlantic Avenue
Boston, MA 02210
United States

Federal Reserve Board of Governors ( email )

Washington, DC 20551
United States

HOME PAGE: http://https://www.federalreserve.gov/econres/jeffrey-p-thompson.htm

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