Changing Wealth Accumulation Patterns: Evidence and Determinants

Abstract

The patterns and determinants of household wealth accumulation have long been of interest to economists. Using the 1989 and 2016 Surveys of Consumer Finance, we examine the determinants of changes in mean and median wealth of households of given ages across different birth cohorts. While the Great Recession reduced wealth in all age groups, longer-term trends show that wealth of older age groups has increased while the wealth of younger age groups has declined. We show that a substantial share of these changes, in both directions, can be explained by the evolution of household demographic and economic characteristics.