• Parental Wealth as Private Insurance
    Team members: Fabian Pfeffer
    External collaborators: Martin Hällsten

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    This project seeks to add empirical credibility to the “insurance function” of families’ wealth for their offspring. Drawing on newly assembled wealth register data for Sweden, it significantly expands an earlier project that compared intergenerational wealth effects across the U.S., Germany, and Sweden. Download

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  • Intergenerational Transfers and the Concentration of Wealth within Family Lineages
    Team members: Fabian Pfeffer
    External collaborators: Andreja Siliunas, Alexandra Killewald

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    This project assesses the total degree of inequality in economic opportunity based on sibling and cousin correlations in family wealth. Using the Panel Study of Income Dynamics (PSID), we describe the concentration of wealth within family lineages across two and three generations in the US, answering how much individuals’ wealth attainment depends on the luck of their birth and even the luck of their parents’ birth. We also describe whether the luck of birth is more important for the wealth attainment of certain groups, such as whites or offspring to wealthy families, and we outline some of the channels that shape the opportunity to attain wealth.

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  • The Demography of Rising Wealth Inequality
    Team members: Fabian Pfeffer
    External collaborators: Matthew Gross, Robert Schoeni

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    This project documents the extent and sources of growing wealth inequality drawing on the Survey of Consumer Finances and using demographic decomposition techniques. We also move beyond a static assessment of relative wealth positions to study changes in the level of wealth insecurity, documenting the extent of fluctuations in family wealth and their economic and demographic determinants using the Panel Study of Income Dynamics. Our assessment of wealth inequality and insecurity spans three decades, but we also pay particularly close attention to changes during the Great Recession. The recent acceleration of some of these long-term trends adds urgency to gain a better understanding of the economic and demographic factors underlying them.

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  • The Accumulation and Intergenerational Transmission of Personal Wealth: New Evidence from IRS Tax Data
    Project team: Fabian Pfeffer, Luis Flores, Dylan Nelson

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    This project assesses how a broad set of tax expenditures on capital – namely deductions on home mortgage interest, IRA contributions, charitable contributions, and others as well as the preferential tax rates on realized capital gains and dividends – shape the accumulation and intergenerational transmission of personal wealth. Our unique contribution consists of a longitudinal assessment of the long-term effects of different tax expenditures on capital drawing on existing IRS panel data. By tracking the cumulative, lifetime benefits of tax expenditures on capital, we will be able to reveal the long-term effects of a broad set of tax instruments on not only the wealth distribution but also the persistence of wealth across generations.

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  • Parental Wealth and Student Aid: Effects of the 1992 Higher Education Act Reauthorization
    Team members: Fabian Pfeffer, Elizabeth Burland

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    This project investigates the short- and long-term causal effects of a policy change introduced during the 1992 reauthorization of the Higher Education Act (HEA). The 1992 HEA reauthorization altered the financial aid available to college students by excluding parents’ home equity from the calculation of students’ financial need, thereby increasing the total amount of financing available to children from families with high home equity and lower incomes. This project studies whether this policy change had substantive average effects on college outcomes (access, persistence, and graduation); heterogeneous effects by students’ family backgrounds, in particular their families’ housing wealth; and long-term effects on later-life outcomes, such as earnings, income, wealth, debt, and home ownership.

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  • Parental Wealth and College Quality
    Team members: Fabian Pfeffer, Brittany Vasquez

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    This project traces the growing importance of parental wealth for children’s college choice and outcomes using restricted data from the Panel Study of Income Dynamics.

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  • Wealth Regimes and the Great Recession: A US-German Comparison
    Team members: Fabian Pfeffer, Dylan Nelson
    External collaborators: Markus Grabka

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    In this project, we compare the United States to Germany, two countries whose macro-economic performance took very different paths over the last years. We describe the economic situation of households in the United States and Germany leading up to and following the Great Recession by investigating trends in the distribution of wealth and the movement of households along the wealth distribution. We interpret the divergent trajectories of these countries during and following the recession vis-a-vis their different patterns and levels of financialization.

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  • The Relationship between Wealth and Income Inequality: A Cross-national Comparison
    Team members: Fabian Pfeffer, Nora Waitkus

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    This project juxtaposes well-established cross-national differences in family income to those in family wealth using the Luxembourg Income Study.

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  • The Private Safety Net: Wealth and the Scarring Effects of Unemployment
    Team members: Fabian Pfeffer
    External collaborators: Martin Ehlert

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    This project assesses the role of family wealth in providing a private insurance function against the wage scarring effects of unemployment using data from the Panel Study of Income Dynamics.

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  • For Richer. The Effects of Marriage on Wealth Accumulation
    Team members: Fabian Pfeffer
    External collaborators: Alexandra Killewald

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    This project investigates the effects of marriage on families’ wealth. Studying the importance of marriage as a wealth-generating process is challenging since marital trajectories and wealth accumulation are dynamic processes with reciprocal effects: marriage is the both the result of prior wealth outcomes and potential determinant of future accumulation. By applying marginal structural models with inverse probability of treatment weights we are able to estimate the total causal effect of years spent married on wealth at midlife. Our analyses of data from the National Longitudinal Survey of Youth 1979 (NLSY79) between 1985 and 2012 reveal that time spent married has positive effects on individuals’ wealth at midlife but that the magnitude of these effects is substantially reduced once we account for dynamic selection into and out of marriage. The magnitude of marriage’s role in wealth accumulation and wealth disparities also depends on how we assume partners to benefit from each others’ assets. Ignoring the asset-pooling effect of marriage, the overall role of marriage for wealth accumulation appears to be rather small. However, these effects are also quite heterogeneous: Women and whites gain more in absolute terms from each additional year spent married than do men and African-Americans.

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