Wealth as Security: Growth Curve Analyses of Household Income and Net Worth During a Recession

Building on evidence of increasing inequality with the 2008–2009 recession, we asked whether households experienced different financial trajectories through the recession depending on initial income and net worth. Using growth curve models of households headed by young adults in the Panel Study of Income Dynamics, we compared the relationship between initial income and net worth and the rate of change of income and net worth from 1989 to 2011 among households with income above and below $50,000. We found different patterns of income change and different relationships among income, net worth, and their rates of change between high- and low-income categories. Results suggest initial wealth helped to stabilize income and wealth changes among higher income households, reducing financial insecurity.     

Decomposing the Black-White Wealth Gap: The Role of Parental Resources, Inheritance, and Investment Dynamics

Much research has shown that even after controlling for income, African Americans suffer from drastically lower net worths than their white counterparts; these differences in net worth have important implications for the overall well‐being of blacks and whites. If not directly from labor market disadvantages–i.e., income differentials–then from what does this racial gap in wealth arise? The current study assesses two complementary accounts of this race difference in asset holdings. The first, the historical legacy thesis, suggests that net wealth differences in the current generation are largely a result of discrimination in past generations; that is, they can be traced to the “head start” that whites have enjoyed in accumulating assets and passing them on. The second theory, the contemporary dynamics thesis, holds that current dynamics of institutional racism in the housing and credit markets are more responsible for the gap. The current study tests the relative impact of multi‐generational forces and contemporary property and credit dynamics by using two‐generational data from the Panel Study of Income Dynamics. It finds that parental wealth and income levels and inheritance all have a significant impact on the wealth levels of the current generation net of respondent socioeconomic characteristics; however, parental wealth and inheritance fail to explain the black‐white gap. Further, this study shows that even predicting net worth from that same family's net worth five years prior (also controlling for savings during the interim), there remains a significantly negative effect of African American race. However, breaking out initial net worth into asset types shows that it may be different investment types and returns that explain the difference in asset accumulation over a five‐year period.     

Parents' Coresidence With Adult Children: Can Immigration Explain Racial and Ethnic Variation?

There is considerable racial and ethnic variation in the prevalence of intergenerational coresidence in the United States. Using data from the Current Population Surveys, we demonstrate that much of this is attributable to recent immigration and the relative economic position of immigrant parents. Multinomial logistic regression results reveal that recent immigrant parents, particularly Asian and Central and South American immigrant parents, are more likely to live in households in which their adult children provide most of the household income. The likelihood of living in this “dependent” role decreases with duration of residence in the United States. The likelihood of living in an intergenerational household in which the parent provides the majority of the household income is not as tied to nativity.     

The Economic Organization of Extended Family Households by Race or Ethnicity and Socioeconomic Status

This study examines differences in the amount of economic support or mutual benefit derived from extended family living arrangements by studying differences in monetary contributions to essential household expenditures across family units in extended family households. Using the 2008 Survey of Income and Program Participation, multivariate regression and selection models are estimated to assess racial differences in family contributions toward household expenses in extended family households. Extended family households have very unequal monetary contributions toward household rent and utilities, although Hispanics have less unequal monetary contributions when compared with other racial groups. Hispanic and Asian extended family households experience decreasing inequality in financial contributions as the income of each family increases, whereas no relationship between financial contributions and income is found for Whites or Blacks. This suggests a different cultural orientation to extended family living arrangements for Asians and Hispanics when compared with non‐Hispanic Whites.     

Net Worth and the Economic Diversity of the Elderly

Using data from the 1984 panel of the Survey of Income and Program Participation (SIPP), this article examines characteristics of the older population disaggregated by net-worth quantities. The authors argue that income is not a sufficient measure of economic status for current policy discussions on issues such as changing Medicare co-payments, increasing the taxation of social security benefits, or means-testing under Medicaid. Net worth is a better measure of economic status, particularly for the elderly, because it represents the net value of assets accumulated over the life course. Their results indicate that there is considerable diversity in the economic status of the older population, which is masked by aggregate statistics (such as means and medians) typically used to summarize the economic status of population groups. Stereotypical views of the elderly based on such aggregates result in misdirected policy formulation. In the future, policymakers will need to formulate policies and program using information on the distributions of income and assets among the older populations rather than relying on statistical aggregates.     

Assessing the Relationship Between Gender,Household Structure,and Net Worth in the United States

This paper examines wealth disparities by gender and household structure in the United States using data from the 1998–2013 Survey of Consumer Finances. Following studies of economic insecurity, we placed households at the center of our analysis to highlight the interconnected nature of wealth with multiple aspects of family structure. We investigated net worth by both gender and household structure, which includes variation by partnership status and the presence of other adult relatives and their roles within the household. We found that wealth disparities were largest among single adult households, but these varied by gender. Female single adult households held some of the lowest levels of net worth, but after accounting for key explanations of wealth inequality, single male households actually held greater wealth than two-adult partnered households. This relationship further depended on the presence of extended family members, where gender disparities were smaller among households with other relatives present.     

The independent effects of socio-demographic and programmatic factors on economic strain among parents in a Child Savings Accounts program

This study examines the independent effects of socio-demographic variables and program social services on the degree of economic strain among lower income parents who had an opportunity to open child savings in a subsidized savings accounts program known as Saving for Education, Entrepreneurship, and Downpayment (SEED). SEED is a policy, practice and research initiative designed to test the efficacy of and inform policy for a national system of asset-building accounts for children and youth. Findings suggest that overall, the degree of economic strain was not significantly different at baseline and at the second wave between parents who opened accounts and those who did not open accounts for their children. However, household income, having a household savings account, and receipt of means-tested welfare programs affected the degrees of economic strain. Implications are directed toward helping lower income families effectively participate in child savings programs.     

The effects of perceived locus of control and perceived income adequacy on satisfaction with financial status of rural households

The purpose of this study is to examine the relationships among selected socioeconomic variables — perceived locus of control, perceived income adequacy, and satisfaction with financial status. Results of the study indicate that age, household income, household net worth, perceived locus of control, and perceived income adequacy are significantly related to satisfaction with financial status. Household income and household net worth have indirect effects on satisfaction through perceived locus of control and perceived income adequacy. Perceived locus of control also has an indirect effect on satisfaction through perceived income adequacy. These findings suggest that counselors and educators should emphasize the importance of perceptions of income adequacy and control over financial aspect in their courses and programs.Journal Paper No. J-14499 of the Iowa Agriculture and Home Economics Experiment Station, Ames, Iowa. Project No. 2809.His research interests include consumer credit and family resource management. He received his Ph.D. from Iowa State University in 1993.Her research interests include family financial management and consumer bankruptcy. She received her Ph.D. from the University of Missouri.     

Gambling Households in Canada

This paper examines the distribution of gambling dollars in Nova Scotia, Saskatchewan and Canada and studies the impact of this spending on households. We focus first on how gambling expenditures are related to the level and source of household income as well as to other demographic characteristics such as age, education, household composition, geographical area, and sources of income. Next we analyze how gambling expenditures are distributed among those households that gamble. We show how expenditure patterns differ in the intensity of gambling as measured by the proportion of household income or total amount of dollars spent on gambling. Then we study the affects that gambling has on spending on household necessities, changes in net worth, retirement savings and household debt. Finally we determine whether gambling expenditures act as a substitute or a complement to other recreational spending on entertainment products and services. Throughout the paper we offer a comparative analysis of provincial and national data.     

Social Exchange Theory and the Division of Household Labor in Same-Sex Couples

Same-sex couples are often not seen as a family unit and are excluded from research, including family research on topics such as household division of labor. The author examined division of household labor, using social exchange theory, among 165 survey respondents in a same-sex relationship. Division of labor was measured by the percentage of tasks performed according to the respondent. Status differences between partners (e.g., higher, equal, lower) in terms of income, education, hours spent on paid labor outside the home, employment status, age, and race (here, only same or different races) were the independent variables. In general, as predicted by social exchange theory, partners with greater resources or power performed fewer household tasks. Satisfaction with division of labor and sense of being appreciated for one's contributions to household tasks were positively correlated with global relationship satisfaction. However, some inconsistencies indicate gaps in social exchange theory and that other factors may be important in understanding division of labor among same-sex couples.     

Differences in the Likelihood of Ownership of Retirement Saving Assets by the Foreign and Native-Born

This research compares the determinants of retirement savings asset ownership between the native-born and immigrants. Analysis of Survey of Income and Program Participation data indicate there do not appear to be differences in the likelihood of ownership between European or Asian immigrants and the native-born, but there are differences between Latin American immigrants and the native-born in retirement savings asset utilization. Distributional effects related to ethnic identity, income, and education appear to compound these differences. While factors indicating greater acculturation increase the likelihood of ownership for all immigrant groups, there are substantial differences in the way these variables affect ownership. General savings asset ownership is more affected by immigration, while retirement savings is more sensitive to acculturation and ethnic identity.     

Assimilation versus multiculturalism: The views of urban Americans

Parents of children in public schools in a large American urban center, representing a number of different ethnic groups, were interviewed about their personal views and feelings toward cultural and racial diversity in America today. Three main issues were addressed: respondents' attitudes toward the maintenance of heritage cultures versus assimilation; their attitudes toward bilingualism; and their attitudes toward other groups in the community. The analyses revealed important differences in attitudes between ethnic minority groups and established white and black groups. Nonetheless, strong support was shown for the retention of heritage cultures, even among middle-class white and working-class black Americans. The working-class white American sample was distinctive in its rejection of multiculturalism and in its negative attitudes toward other ethnic and racial groups. All groups supported the idea of bilingualism for their children, and certain groups thought that public schools had an important role to play in its promotion. Overall, the results delineate a series of factors that affect intragroup and intergroup harmony and the processes of adjustment that transpire within a social system when it has to cope with ethnic and racial diversity.     

Boom and bust: housing equity withdrawal and consumption decisions and their impacts on household wealth

The authors examine whether the surge in housing refinance and equity withdrawal generated by the housing boom disproportionately affected older households in terms of decisions on whether to refinance, whether to withdraw equity, and how much to withdraw, and how in turn these decisions affected their household wealth. Using the Federal Reserve's Survey of Consumer Finances, the authors found the highest rates of refinancing and cashing out equity among older (although not necessarily the oldest) households. The authors also found that appreciation in house value, being a baby boomer, and having higher household income were the factors that most increased the probability of refinancing and withdrawing equity. Amounts cashed out were higher among older than among younger households. Ordinary least squares (OLS) estimates showed that amounts withdrawn were increased by price appreciation, financial assets, and income, along with being a "pre-boomer" or "early boomer." Older cohorts displayed larger wealth effects than younger ones, but their withdrawn equity was a smaller percentage of total net worth. A relatively small percentage of respondents' dollars was used for consumption, and most dollars were used for home improvement, other investment, or debt repayment. However, massive equity withdrawal and the subsequent collapse of housing prices have caused housing leverage to soar, putting some homeowners "underwater" and jeopardizing others' retirement preparedness. The ensuing housing finance crisis raises numerous policy issues, from reform of mortgage underwriting, securitization, servicing, and foreclosure procedures, to potential limitations on borrowing against unrealized housing equity gains, to enhanced government transfers for distressed older homeowners, to local and state revenue policy changes.     

DETERMINANTS OF WELFARE POLICY ATTITUDES: A CONTEXTUAL LEVEL ANALYSIS

Using the 2008 Chicago Area Study, this article tests how residential context plays a role in welfare policy attitudes, controlling for individual level characteristics. The contextual level variables of household public assistance use and minority concentration in respondents' neighborhoods are tested using multinomial logistic regression analysis. When including controls for education, income, political party, age, employment status, gender, and race, respondents residing in neighborhoods with a higher concentration of African Americans are more likely to endorse positive attitudes toward welfare policy. Additionally, an interaction effect is found between individual level income and household public assistance use in the ZIP code when predicting welfare policy attitudes. Lower income respondents residing in neighborhoods with higher household public assistance use are more likely to endorse positive attitudes toward welfare than their higher income neighbors. Given the exploratory nature of this study, the author concludes with implications for such findings and proposes future research.     

Social capital and household income distributions in the United States: 1980, 1990

This paper asked if changes in social capital influence the level and disparity of household income in the United States. Social capital is defined in this paper as one's sympathy (antipathy) for others and one's idealized self. Changes in social capital are expected to produce the following economic consequences. First, increases in social capital are expected to alter the terms of trade and to increase the likelihood of trades between friends and family. Second, increases in social capital are expected to increase an economic agent's concerns for the external consequences of his or her choices, internalizing what otherwise would be considered externalities. Third, increases in social capital between firms are expected to increase the likelihood that they will act in their collective interest. Fourth, increases in social capital are expected to increase the opportunities for specialization and the likelihood of trade. Finally, increases in social capital are expected to raise the average level of income and reduce the disparity of income.This paper empirically tested the relationship between changes in social capital indicator variables and changes in the average and coefficient of variation (CVs) of household income. State CVs and averages of household income were calculated for all 50 states and for different races/ethnic groups using the U.S. Census data for 1980 and 1990. Social capital indicator variables selected to measure changes in social capital included measures of family integrity including the percentages of households headed by a single female with children; educational achievement variables including high school graduation rates; crime rate variables including litigation rates; and labor force participation rates. The social capital indicator variables appeared to be significantly correlated with each other. However, in 1980, the percentages of households headed by a single female with children was not significantly related to the birth rates of single teens. By 1990, however, a strong correlation was found between the percentages of households headed by a single female with children and the birth rate of single teens.Income inequality among U.S. households measured using CVs increased between 1980 and 1990 in all 50 states. The largest increase in CVs was among white households. The smallest increase in CVs was among Asian households. The states with the largest increase in the ratio of 1990 and 1980 CVs were Arizona, Wyoming, Maine, Vermont, and Texas. Half of the states reported decreases in real household income between 1980 and 1990. Those states with the largest percentage decrease in real income were Wyoming, Alaska, Montana, Louisiana, and West Virginia. The largest percentage increase in real income was reported by Connecticut, New Jersey, Rhode Island, and Massachusetts.State CVs and averages of household income were regressed on four factors or subsets of social capital indicator variables. The four factors used to predict CVs and averages of household income were generally statistically significant. The findings of this report support the conclusion that changes in social capital have a significant effect on the disparity and level of household income.     

Acculturation and Depressive Symptoms in Mexican American Couples

SUMMARY

Despite interest in examining the relationship between acculturation and depressive symptomatology among Latinos, limited attention has been given to these factors within the context of the Latino marital environment. The present study examines the role of acculturation in determining depressive symptoms among 173 married, Mexican American (MA) couples who participated in the 1992 Health and Retirement Survey, Wave I, while holding relevant variables (i.e., age, years of formal education, logged lower body difficulties, logged household income, logged household net worth, and logged household size) constant.

Aspects of acculturation are measured both at the individual level (language used during interview and nativity) and couple level (dyad concordance on language preference and nativity). Multilevel analysis revealed significant correlation between spouses' depressive symptomatology (intraclass correlation, ρ = .41), suggesting that the study of depressive symptoms in MA couples requires attention to their interpersonal contexts. Contrary to expectation, acculturation, logged household size, and socioeconomic variables (education, logged household income, and logged household net worth wealth) were not significantly associated with depressive symptoms. Age and logged lower body disability were significantly associated with depressive symptoms. Discussion focuses on the importance and challenge of assessing acculturation when exploring risk and protective factors on depressive symptomatology among mid-life and older MA couples.     

The National Social Distance Study: Ten Years Later

The Bogardus social distance scale, which measures the level of acceptance that Americans feel toward members of the most common ethnic and racial groups in the United States, was administered six times nationally between 1920 and 2001. Replicating the most recent study with its revised list of ethnic and racial groups, the authors of this study analyzed a stratified random sample of 3,166 college students, making it the largest national social distance study ever conducted. The findings indicate an increase since 2001 in the mean level of social distance toward all ethnic groups, as well as in the spread between the groups with the highest and lowest levels of social distance. Further, a consistency between studies in group preferences reaffirms the relevance of the similarity‐attraction bond in accepting those who are racially and culturally different. Mean comparisons and analysis of variance tests also showed that gender, birthplace of respondents and/or their parents, race, and year in college are all significant indicators of the level of social distance toward groups.     

Does Self-control Predict Wealth Creation Among Young Baby Boomers?

Why similar people have different patterns of wealth accumulation is puzzling. The behavioral life-cycle hypothesis indicates self-control is an important aspect of household saving behavior. This study investigated if household wealth creation from 1994 to 2008 could be predicted by self-control among a sample of young baby boomers using National Longitudinal Survey of Youth (NLSY79) data. Variables that significantly predicted 2008 net worth included homeownership, 1994 net worth, income, bankruptcy filing, inheritance, education level, race, marital status, children, retirement planning activities, locus of control, and self-mastery. The addition of self-control predictors to a regression model improved the model’s ability to predict net worth by 1.3 % above and beyond the human capital, financial status, and demographic predictor variables. In total, the model explained 60 % of the variance in net worth. Findings indicated that individuals who invested in their human capital, were homeowners, and had higher self-control, accumulated more wealth.     

Income inequality, race, and child well-being: an aggregate analysis in the 50 United States

Interest in income inequality as a predictor of health has exploded since the mid-1990s. Recent analyses suggest, however, that the effect of income inequality on population health is not robust to a control for the racial composition of the population. That observation raises two interpretational questions. First, does income inequality have an independent effect on population health? Second, what does the effect of racial composition on population health mean? We use data from the Urban Institute's Assessing the New Federalism project and the Kids Count Databook to evaluate the aggregate effects of income inequality on diverse measures of child well-being (e.g., infant mortality, high school drop-out rates) in the 50 U.S. states. We replicate the finding that, net of the racial/ethnic composition of the population, the effects of income inequality are not significant. Moreover, the effects of racial composition on child well-being appear to be compositional (i.e., they reflect the less positive outcomes observed among racial/ethnic minorities) rather than contextual (i.e., representing the independent influence of social context). Whereas cross-level effects are still possible, our results cast doubt on the health relevance of these aggregate characteristics of the population.