Wealth in America: Trends in Wealth Inequality

Rating:
Summary: Examining Wealth with the Aid of Statistical Models
Review: "Wealth in America" is a fascinating book, examining not only the state of wealth as it stands presently, but also looking at trends over time. The first chapter looks at what wealth is, how it has been studied to date, and then presents how the rest of the book is structured. The second chapter looks at the various studies available on wealth, the issues that arise with wealth measurement, and the pros and cons of the models that the author will use throughout the book. It is these simulation models that render this book unique, allowing the author to consider various trends and examine different possibilities that could otherwise only be speculated about.

For the general reader, things get interesting in chapter three: Here we take a look at who owns how much, in what categories, as well as different general trends over time and up and down the wealth scale. Chapter four focuses on the wealth of the very rich: the composition of their wealth and liabilities, the characteristics of wealthy households, and the effect that race has on wealth accumulation. Chapter five looks at the middle class and the poor. The bar graph on page 125 really brings home how little of the assets the bottom 90% of the population controls versus the top ten percent. Chapter six looks at how baby boomers have fared in comparison to their parents and projects how they may do in their coming retirement years. Chapter seven looks at the role of stock market and real estate fluctuations on wealth holdings, as well as the impact that government policies can have. Chapter eight focuses on the impact that age, race, education and other life events have on wealth accumulation and ownership. Chapter nine examines the prospects for moving from one segment of wealth ownership to a greater or lesser one. The final chapter then wraps up with some general conclusions.

Through out the book, the author is explicit about her use of simulation models to make projections as to where different trends might take us. However, when possible, the author is also very careful to also compare her models against actual data, so that it is clear that the discrepancies are minor. I would have liked to have seen a greater breakdown of the assets and liabilities of the middle class and poor, as well a greater examination of their saving and accumulation behavior (or lack of), but perhaps this is material for another book.

This book is not easy reading, but for someone who is willing to put in a little effort, this book contains a treasure trove of information on wealth that is not readily found elsewhere. I would certainly recommend it to someone with an interest in the subject.

Rating:
Summary: Examining Wealth with the Aid of Statistical Models
Review: "Wealth in America" is a fascinating book, examining not only the state of wealth as it stands presently, but also looking at trends over time. The first chapter looks at what wealth is, how it has been studied to date, and then presents how the rest of the book is structured. The second chapter looks at the various studies available on wealth, the issues that arise with wealth measurement, and the pros and cons of the models that the author will use throughout the book. It is these simulation models that render this book unique, allowing the author to consider various trends and examine different possibilities that could otherwise only be speculated about.

For the general reader, things get interesting in chapter three: Here we take a look at who owns how much, in what categories, as well as different general trends over time and up and down the wealth scale. Chapter four focuses on the wealth of the very rich: the composition of their wealth and liabilities, the characteristics of wealthy households, and the effect that race has on wealth accumulation. Chapter five looks at the middle class and the poor. The bar graph on page 125 really brings home how little of the assets the bottom 90% of the population controls versus the top ten percent. Chapter six looks at how baby boomers have fared in comparison to their parents and projects how they may do in their coming retirement years. Chapter seven looks at the role of stock market and real estate fluctuations on wealth holdings, as well as the impact that government policies can have. Chapter eight focuses on the impact that age, race, education and other life events have on wealth accumulation and ownership. Chapter nine examines the prospects for moving from one segment of wealth ownership to a greater or lesser one. The final chapter then wraps up with some general conclusions.

Through out the book, the author is explicit about her use of simulation models to make projections as to where different trends might take us. However, when possible, the author is also very careful to also compare her models against actual data, so that it is clear that the discrepancies are minor. I would have liked to have seen a greater breakdown of the assets and liabilities of the middle class and poor, as well a greater examination of their saving and accumulation behavior (or lack of), but perhaps this is material for another book.

This book is not easy reading, but for someone who is willing to put in a little effort, this book contains a treasure trove of information on wealth that is not readily found elsewhere. I would certainly recommend it to someone with an interest in the subject.

Rating:
Summary: Forget income, look at wealth inequality!
Review: In this scholarly and provocative book, Lisa Keister argues that social scientists have been so caught up in studying occupational mobility and income attainment that they have missed the central feature of the social landscape in America: wealth is extremely unequally distributed and shows little sign of being redistributed equally. In 1995, the top 1% of wealth owners owned about two-fifths of net worth and nearly half of all financial wealth. By contrast, the bottom 60% owned less than 5% of net worth and had basically NO financial wealth.

Keister painstakingly assembled a massive data set from various surveys and government reports, covering the period 1962-1995. In addition to analyzing the actual data, she also built simulation models that allowed her to model the processes underlying changes over time. The simulation models also allowed her to perform "what if" scenarios. For example, she showed that the very high threshhold for estate taxes is probably the single biggest contributor to the perpetuation of wealth inequality across generations. She was also able to show that, contrary to what many commentators have claimed, the baby boomer generation adopted various strategies that have enabled them to do better, economically, than their parents.

I highly recommend this book to scholars interested in trends in wealth inequality, and to public policy makers who might wish to do something about it. Keister relegated much of the technical details to an Appendix, but the book will still be heavy going for the statistically challenged. Nonetheless, upper level college and graduate students taking courses in social inequality, political economy, public policy, social and economic justice, and related fields would benefit enormously from reading this book.