Assets and Income: Disability-based Disparities in the United States

Abstract

The authors analyzed data from the 2001 Survey of Income and Program Participation (SIPP) to determine the extent of a disability-based net worth and income gap among U.S. households. The sample included 4,154 households with an adult with disabilities and 12,365 households without an adult with disabilities. Households with an adult with disabilities had substantially reduced net worth and income as contrasted with households without adults with disabilities, regardless of family structure (married couple, single women, or single men). Policy implications are discussed. KEY WORDS: assets; disabilities; income gap; Survey of Income and Program Participation ********** Assets are resources that families can use to invest for long-term economic and social well-being (Shapiro & Wolff, 2001; Sherraden, 1991). Assets such as homes, saving accounts, and business equity provide stability and offer a cushion in difficult times. Accumulation of assets facilitates long-term financial well-being as well as opportunities for social mobility and increased pohtical participation and power (Building Assets, 2005; Wolff & Zacharias, 2007). There is disturbing evidence of asset inequality in the United States. Recent research found that the top 20% of U.S. income earners hold more than 80% of all U.S. wealth, and the bottom 40% of U.S. income earners hold less than 5% of all U.S. wealth (Wolff, 2004). Moreover, net worth trends suggest that wealth increases have occurred at the top of the income distribution. Although both median and mean net worth increased between 2001 and 2004, median income increased 1.5% compared with the 6.3% increase in mean net worth. As such, the wealthiest households gained much of this increase (Bucks, Kennickell, & Moore, 2006). At the other end of the income distribution, the poorest 15% of households have zero or negative net worth (Caner & Wolff, 2004). Millions of U.S. families have few or no assets. The United States has traditionally used an array of tools to help low-income households. U.S. programs that provide direct payments or support to individuals have tended to focus on a combination of income maintenance, consumption needs (for example, food stamps, Medicaid), and work incentives. In recent years, the idea of asset building as a strategy for social and economic development for the poor has gained serious consideration. Although there is considerable evidence about elevated income poverty rates among U.S. adults with disabilities, almost nothing is known about asset holding patterns among this population. Using a nationally representative data set, the purpose of this study was to explore whether the disability-based asset gap is comparable to the disability-based income gap for adults and to examine asset holding among different family structures. LITERATURE REVIEW Disability and Income Poverty Researchers have investigated income poverty among U.S. adults with disabilities, defined as people with substantial functional limitations or restrictions in their activities of daily living (ADLs) (Steinmetz, 2006). Although income poverty rates differ somewhat depending on the data source, there is convergence that adults with disabilities experience significantly higher rates of income poverty than nondisabled adults (Steinmetz, 2006). Ten percent of nondisabled working-age people were poor in 2000, substantially below the 19% poverty rate for same-age people with disabilities (Waldrop & Stern, 2003). Higher poverty rates for people with disabilities are related to elevated living costs (for example, costs associated with transportation, medical care, and home adaptations) and the fact that public health insurance and other assistance provided to people with disabilities do not cover a substantial portion of these costs (Elwan, 1999; GAO, 1999). The elevated living costs associated with having disabilities increases the need for income to meet these obligations. …