Is there wealth stability across generations in the U.S.? Evidence from panel study, 1984–2017

Jermaine Toney

Contemporary Economic Policy, 2022, vol. 40, issue 4, 551-567

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.

Date: 2022
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