Changing Patterns in Household Ownership of Municipal Debt: Evidence from the 1989-2013 Surveys of Consumer Finances

Daniel Bergstresser () and Randolph Cohen
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Daniel Bergstresser: Brandeis University
Randolph Cohen: Massachusetts Institute of Technology

No 87, Working Papers from Brandeis University, Department of Economics and International Business School

Abstract: The period since 1989 has seen significant changes in the structure of household ownership of municipal debt, with ownership becoming concentrated in a smaller number of households over time. The share of households holding any municipal debt fell from 4.6 percent to 2.4 percent between 1989 and 2013. The share of total debt that is held by the wealthiest 0.5 percent of households rose from 24 percent to 42 percent over the same period. These changes have coincided with the growth of tax-deferred retirement investment accounts such as 401(k) plans as a primary location of household investing. Municipal bonds, which pay tax-exempt interest, are almost never held inside of these tax-deferred accounts. These changing patterns of ownership have implications for the political economy of the municipal bond market.

Keywords: Municipal; bonds (search for similar items in EconPapers)
Pages: 39 pages
Date: 2015-06
New Economics Papers: this item is included in nep-ure
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Citations: View citations in EconPapers (5)

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http://www.brandeis.edu/economics/RePEc/brd/doc/Brandeis_WP87.pdf First version, 2015 (application/pdf)

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