Abstract
The wealth of US families had not returned to its prerecession level by 2013, six years after the onset of the Great Recession. This article provides a comprehensive analysis of this slow and uneven episode of wealth recovery, using family-level data from the Survey of Consumer Finances 1989–2013. Both descriptive results and regressions controlling for life cycle wealth accumulation show that families of color and less-educated families are falling behind in wealth recovery because their wealth portfolios are concentrated in housing, which has recovered very slowly. The decomposition results suggest that homeownership plays a significant role in explaining wealth disparity by race, ethnicity, and education at the mean and bottom of the wealth distribution. Understanding the uneven wealth recovery has important implications for redesigning asset-related policies and narrowing wealth gaps.
Funding statement: This research is supported by the funding from NSFC (71603157) and Guangdong NSF(2017A030313446).
Acknowledgments
The authors are grateful to the anonymous referee, Shimeng Liu, and Jingliang Lu for their helpful comments. We value the input from seminar participants at the Urban Institute and Renmin University of China, conference participants at the 2015 International Symposium on Contemporary Labor Economics at Xiamen University and the Association for Public Policy Analysis and Management 2016 annual conference.
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