DURING THE 1990s, the United States has experienced substantial economic growth in both family income and wealth. The rise in wealth has occurred despite the well-documented decline in traditional saving and investment since the mid1980s. However, because of the lack of panel data on the composition of individual wealth holdings, it has not so far been possible to analyze properly the changing patterns in household wealth accumulation or the distribution of these changes across the population. This paper introduces features of the comprehensive measures of wealth, saving, and income in the Michigan Panel Study of Income Dynamics (PSID), in particular, the supplements on household family wealth funded by the National Institute on Aging. These datacurrently available for 1984, 1989, and 1994-permit an improved understanding of a number of issues, such as generational differences in long-term saving and wealth accumulation, differences in the accumulation of wealth between African American and other households, regional differences in accumulation, and the importance for wealth

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The wealth of the wealthy

The wealth dynamics of American families, 1984-94

Consumer Economics, A Survey

Ever since the U.S. federal–state system of unemployment insurance was founded in the 1930s, it has provided partial, temporary replacement of wages to eligible workers who lose jobs “through no fault of their own” (as determined by state-level regulations). Unemployment insurance is one of the largest social insurance programs in the United States, with benefits paid totaling about $34 billion in 2004. This figure is considerably smaller than for Social Security, Medicare or Medicaid, but it exceeds spending on such major programs as Workers’ Compensation, Temporary Assistance to Needy Families (TANF) or Food Stamps. In this paper we focus on the ways economic theory can help us understand the challenges that this complex program is likely to face over the next few years. We begin by summarizing the salient characteristics of the unemployment insurance program and then examine the theoretical and econometric research. Much of this research revolves around the main goals of the program, which include: 1) sustaining consumption for workers and their families; 2) helping recipients to make efficient job choices during a period of financial stress; and 3) minimizing the adverse incentives that may accompany partial wage replacement. Of course, these goals can come into conflict—for example, if replacing wages for an unemployed worker also discourages that worker from aggressively searching for or accepting a new job—and our discussion will focus on these conflicts. With this background, we then conclude with a discussion of the key policy issues that the unemployment

/pdf/unemployment-insurance-strengthening-the-relationship-j3s6s2yb3n.pdf

Unemployment Insurance: Strengthening the Relationship between Theory and Policy

Has the financial wealth of American families grown in the recent years, despite the low household savings rates? Has ownership of wealth become more concentrated in the upper part of the wealth distribution? Are there generational differences in long-term saving for the purposes of bequests and retirement? Are there differences between the levels of wealth and the accumulation of wealth between African American households and other households after controlling for income and other demographics? Is it possible that some regions of the country acquire wealth more rapidly than other regions? With the advent of a proliferation of saving vehicles, each having different, uncertain returns, household saving behavior is far more complex than it was two decades ago. Given the lack of panel data, changing patterns in household wealth accumulation, particularly since the 1970’s, have received scant attention in scholarly research. Our analysis sets out to explain the foundations of the recent evolution of household wealth. Since the 1990’s, the United States has been experiencing substantial economic growth as measured by both per family income and wealth. This rise in wealth has occurred despite the well documented decline in traditional savings and investment which has taken place since the mid 1980’s. Human capital investment has been strong and the earnings distribution continues to favor the well-educated. Unlike the mid 1970’s when there was an oversupply of college graduates, the earnings of educated workers have risen for the last 20 years despite the increase in the relative supply of skilled workers. Additionally, this shift toward more human capital has enhanced the labor market role of women. This rise in wages combined with the rising supply of educated workers appears to be explainable by a simple general equilibrium model where skilled and less skilled workers initially trade final or intermediate goods which are more specialized to each. Information technology effects a type of skill-biased technical change which allows the skilled workers to produce things

Wealth Dynamics of American Familes: 1984-1994 1

The article reviews the literature on the rich, the affluent and the top income earners focusing on the determinants of affluence or richness. The review surveys empirical results about the composition of the income and wealth of the rich and its direct determinants, such as individual characteristics, the state and the structure of production. The article covers literature beginning with the early twentieth century but pays special attention to research conducted after the 2000s. It attempts to cover studies from all regions of the world, despite the concentration of current research on developed countries. The main conclusion is that factors not related to productivity are a key determinant of affluence and that this has not changed much over the last century.

The wealth of the wealthy

Citations

The wealth dynamics of American families, 1984-94

Consumer Economics, A Survey

Unemployment Insurance: Strengthening the Relationship between Theory and Policy

Wealth Dynamics of American Familes: 1984-1994 1

The rich, the affluent and the top incomes

References

The powerful consumer

An investigation of response error 2

Consumers’ net worth: the 1953 savings survey

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