Wealth Concentration in the United States Using an Expanded Measure of Net Worth

Alice Henriques Volz, Lindsay Jacobs (), Elizabeth Llanes (), Kevin B. Moore and Jeffrey Thompson
Additional contact information
Alice Henriques Volz: https://www.federalreserve.gov/econres/alice-henriques-volz.htm
Lindsay Jacobs: https://lafollette.wisc.edu/faculty-staff/faculty/lindsay-jacobs
Kevin B. Moore: https://www.federalreserve.gov/econres/kevin-b-moore.htm

No 21-6, Working Papers from Federal Reserve Bank of Boston

Abstract: Defined benefit (DB) pensions and Social Security are two important resources for financing retirement in the United States. However, these illiquid, non-market forms of wealth are typically excluded from measures of net worth. To the extent that these broadly held resources substitute for savings, measures of wealth inequality that do not account for DB pensions and Social Security may be overstated. This paper develops an alternative, expanded wealth concept, augmenting precise net worth data from the Survey of Consumer Finances with estimates of DB pension and expected Social Security wealth. We use this expanded wealth concept to explore the concentration of wealth among households aged 40 to 59 and find that (1) including DB pension and Social Security results in markedly lower measures of wealth concentration and that (2) trends toward higher wealth inequality over time, while moderated, are still present.

Keywords: wealth concentration; saving; Social Security; pensions (search for similar items in EconPapers)
JEL-codes: D14 D31 D63 G51 I31 J15 (search for similar items in EconPapers)
Pages: 24
Date: 2021-04-01
New Economics Papers: this item is included in nep-age and nep-cwa
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Citations: View citations in EconPapers (5)

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DOI: 10.29412/res.wp.2021.06

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