Abstract
Abstract Using the 2006 and 2010 Health and Retirement Study, we explore how the recent recession impacted the wealth holding and retirement plans of older households in the United States. Of particular interest to us is whether the impact on household asset ownership, asset wealth and household retirement behavior varied with the nativity of the household and its standing in the wealth distribution prior to the onset of the recession. We find that the so-called Great Recession made a significant dent on the portfolios of older American households by eroding the value of specific assets to the point of delaying their planned retirement. Furthermore, its impacts were unevenly distributed across demographic and economic groups, with mixed and immigrant households in the middle and top wealth quartiles prior to the recession enduring significantly larger wealth losses than natives due, primarily, to their greater losses in primary housing ownership and primary housing values. JEL codes: D31; J26
Highlights
We examine how the 2008–2009 recession has impacted the wealth and wealth composition of older immigrant and native households in the United States
6 Did the recession impact rich and poor households ? To address this question, we estimate equation (2) for households at different quartiles of the wealth distribution prior to the recession in 2006.17 Because the cells become fairly small for some of the wealth categories as we split the sample by nativity and wealth quartiles, we report on the impact of the recession on the ownership and wealth holdings in the most prominent wealth categories, namely: net wealth, financial wealth and primary home equity
We find that the 2008–2009 economic downturn lowered the total net wealth of older native households by approximately 26 percent
Summary
We examine how the 2008–2009 recession has impacted the wealth and wealth composition of older immigrant and native households in the United States. If the wealth accumulation patterns of households differ by nativity and the recession impacted the ownership rates and values of various assets differently, the downturn may have had different impacts on these various groups of households. The declines in asset values may have been harmful among groups with inadequate safety nets Due to their undocumented status ( or in the past), shorter work histories or differences in employment patterns, immigrant households might be less likely to qualify for old age social security benefits than natives. Its impacts were unevenly distributed across demographic and economic groups, with mixed and immigrant households in the middle and top wealth quartiles prior to the recession enduring significantly larger wealth losses than natives due, primarily, to their greater losses in primary housing ownership and primary housing values
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