The contributions of not having a college degree, being a to year-old household head, being a childless nonelderly couple, or being an unmarried elderly person seem to have increased. The contribution to net worth poverty of being a homeowner also went up. Descriptive statistics suggest that changes in the value of assets are more effective in transitions into and out of asset poverty than are changes in debt.
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Some lifetime events, such as changes in marital, homeownership, or business ownership status, are also correlated with the transitions. Despite decades of policies aimed at improving the economic position of African Americans in terms of relative income and earnings, they remain substantially behind whites.
The research presented in this brief indicates that the wealth gap is even more staggering. Following families over time in order to understand racial differences in the sources and patterns of wealth accumulation, Senior Scholar Edward N. Wolff finds that African Americans would have gained significant ground relative to whites in the past 30 years if they had inherited similar amounts, comparable levels of family income, and more similar portfolio compositions. Therefore, even if the income gap between whites and African Americans were immediately eliminated, it may take another two generations for the wealth gap to close.
Using both time-series and pooled cross-section, time-series data for 44 industries in the United States over the period —97, the authors find no evidence to support the idea that the growth of skills or educational attainment had any statistically significant effect on growth of earnings.
However, earnings growth is found to be positively related to overall productivity growth and equipment investment, while computerization and international trade both had a retardant effect on earnings. Recent work has documented a rising degree of wealth inequality in the United States between and In this paper we look at another dimension of the distribution: polarization.
Using techniques developed by Esteban and Ray and extended by D'Ambrosia , we examine whether a similar pattern exists with regard to trends in wealth polarization over this period. The approach followed provides a decomposition method, based on counterfactual distributions, that allows one to monitor which factors modified the entire distribution and precisely where on the distribution these factors had an effect.
An index of polarization is provided, as are summary statistics of the observed movements and of distance and divergence among the estimated and the counterfactual distributions. The decomposition method is applied to US data on the distribution of wealth between and We find that polarization between homeowners and tenants and among different educational groups continuously increased from to , while polarization by income class continuously decreased.
In contrast, polarization by racial group increased from to and then declined from to , while polarization by age group followed the opposite pattern. We also find that most of the observed variation in the overall wealth density over the period can be attributed to changes in the within-group wealth densities rather than changes in household characteristics. A vast literature in economics has examined the economic progress of African Americans during this century.
Most of these studies have focused on income--or on even narrower measures of economic well-being, such as earnings--to assess the extent to which any gains made relative to other racial groups can be attributed to such factors as declining racial discrimination, affirmative action policies, changes in industrial composition, or a narrowing gap between the educational levels of African Americans and the rest of the population.
However, studies of earnings and income, while important for assessing the extent to which labor market discrimination exists and the ability of African Americans to move closer to whites in terms of acquiring the skills and connections that are currently rewarded by the markets, provide an incomplete picture.
This paper therefore explores how African Americans have fared in terms of wealth, a less well-known factor and an important measure of economic well-being. Using data from the Survey of Consumer Finances, I find that wealth inequality continued to rise in the United States after , though at a reduced rate. The share of the wealthiest 1 percent of households rose by 3. Between and , 53 percent of the total growth in net worth accrued to the top 1 percent of households and 91 percent to the top 20 percent.
Another disturbing trend is that median net worth in constant dollars , after growing by 7 percent from to , increased by only another 4 percent by Moreover, the financial resources accumulated by families in the bottom three income quintiles were very meager and dwindled between and The new figures also point to the growing indebtedness of the American family, with the overall debt-equity ratio climbing from 0.
Household financial assets
The ownership of investment assets was still highly concentrated in the hands of the rich in About 90 percent of the total value of stocks, bonds, trusts, and business equity were held by the top 10 percent. Despite the widening ownership of stock 48 percent of households owned stock shares either directly or indirectly in , the richest 10 percent still accounted for 78 percent of their total value. With regard to racial and ethnic differences, the results show that over the period to non-Hispanic African American households made some gains relative to whites in median net worth and home ownership but remained the same in terms of mean net worth.
Hispanic households made significant gains on non-Hispanic white households in terms of mean net worth and home ownership but not in terms of median wealth. Profitability in the United States has been rising since the early s and by was at its highest level since its postwar peak in the mid s, and the profit share, by one definition, was at its highest point. In this paper I examine the role of the change in the profit share and capital intensity, as well as structural change, on movements in the rate of profit between and Its recent recovery is traced to a rise in the profit share in national income, a slowdown in capital-labor growth on the industry level, and employment shifts to relatively labor-intensive industries.
The potential usefulness of the exercise is to warn policymakers of dangers that may exist and to help them think out what policy instruments are, or should be made, available to deal with worst cases, should they arise. Why does a dynamic growing economy have a persistent long-term unemployment problem? Research Associates Baumol and Wolff have isolated one cause.
Although technological change, the engine of growth and economic progress, may not affect or may even increase the total number of jobs available, the fact that it creates a demand for new skills and makes other skills obsolete can cause an increase in the overall rate of unemployment and the length of time during which an unemployed worker is between jobs. It goes without saying that society will not choose to slow technical innovation, but the task for policy is to find ways to offset the problems caused by this rising level and duration of unemployment.
The mean duration of unemployment approximately doubled in the United States between the early s and the mids, with most of the increase occurring since the early s. Using a simple model linking the average duration of unemployment with the speed of technical change, and aggregate time-series data, the authors find strong evidence that both the rate of total-factor productivity growth and investment in office, computing, and accounting equipment OCA per employee have a significant positive effect on mean unemployment duration.
Moreover, literally all of the two-thirds rise in mean unemployment duration between and two similar points in the business cycle can be attributed to increases in OCA investment. Wolff of New York University find that gender wage differentials can be explained only in part by the distribution of women and men in different industries, and that other factors, such as discrimination, play a role as well.
They make the case that focused antidiscrimination policy can be effective in reducing the gender gap. Wolff, both of New York University, explore the effects of the rate of technological progress on unemployment. They hypothesize that the sunk costs associated with a worker's training will depend on his or her previous training and education and the current pace of technological change. The faster the pace of change, the greater the sunk training costs, although education moderates the magnitude of those costs.
https://propvafengoo.ml A firm weighs wage and sunk training costs against a worker's marginal revenue yield. These factors combine to the disadvantage of the poorly educated, who will be forced to accept either a low wage or a longer duration of unemployment.
A faster pace of technological change exacerbates this disadvantage. In this working paper Research Associate Edward N. Wolff documents changes during the period —90 in aggregate skill levels of the workplace. Wolff investigates skill trends at the sectoral level, paying special attention to changes in skill requirements in service and goods-producing sectors, and examines the role of technological change in changing the demand for skills.
He reports the results of a regression analysis in which he relates changes in skill indexes to various measures of technological activity.
The fact that levels of poverty and inequality showed an unprecedented rise in the s in the United States despite a sustained expansion beginning in raises concerns about appropriate policy actions needed to offset these developments. The papers in this volume explore manifestations of this inequality, including unexpectedly high poverty rates, shrinkage of the middle class, a growing intergenerational wage gap, a growing earnings gap between college and high school graduates, and increasing dispersion of the distribution of family income even with increased participation of female household members in the labor force.
Measurement issues explored include the use of earnings capacity, health status, and indicators of living conditions to define poverty status. Contributors to this volume include Robert B.
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