Abstract
In discussions of household wealth, it is not surprising that discussion often tends to focus on the upper half of the wealth distribution: According to the 2007 Survey of Consumer Finances (SCF), that group held 97.5 percent of all directly owned household wealth. This paper investigates the wealth dynamics of the lower half of the distribution using data from the 2007– 2009 SCF panel to examine the degree of distributional mobility among this group, the demographic characteristics associated with such change and the role of initial portfolio allocation. It also provides information from earlier SCFs and the 2010 SCF to put the results in perspective. The analysis and conclusions set forth are those of the author and do not indicate concurrence by other members of the research staff or the Board of Governors. The author is grateful for the contributions of Jesse Bricker, Brian Bucks, Gerhard Fries, Traci Mach, Kevin Moore and other Federal Reserve colleagues; Catherine Haggerty, Micah Sjoblom and other NORC central office and field staff; and Susan Boehmer, Barry Johnson, David Paris and other staff at the Statistics of Income Division of the IRS. Above all, the author is grateful to the respondents to the SCF for their generosity in sharing their personal information in the interest of research. The author is solely responsible for any errors of commission or omission in this paper.
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