Presentation by Nadia Karamcheva, an analyst in CBO’s Microeconomic Studies Division, to the Savings and Retirement Foundation in Washington, D.C. From 1989 to 2013, family wealth grew at significantly different rates for different segments of the U.S. population, and the distribution among the nation’s families was more unequal in 2013 than it had been in 1989.

1. Congressional Budget Office
Changes in Family Wealth, 1989 to 2013
Savings and Retirement Foundation
Washington, D.C.
January 18, 2017
Nadia Karamcheva
Microeconomic Studies Division
The information in this presentation is drawn from Trends in Family Wealth, 1989 to 2013 (Congressional Budget Office,
August 2016), www.cbo.gov/publication/51846.

2. 1CONGRESSIONAL BUDGET OFFICE
Research Questions
■ How is family wealth distributed?
■ How did the distribution of family wealth change from 1989 to
2013?
■ How did changes in families’ assets and debt contribute to changes
in the wealth distribution from 1989 to 2013?

3. 2CONGRESSIONAL BUDGET OFFICE
Preview of Results
■ Family wealth in the United States is unevenly distributed. In 2013:
– Families in the top 10 percent of the wealth distribution held 76 percent
of all family wealth,
– Families in the 51st to the 90th percentiles held 23 percent, and
– Families in the bottom half of the distribution held 1 percent.
■ Over the period from 1989 through 2013, family wealth grew at
significantly different rates for different segments of the U.S.
population. The distribution of wealth among the nation’s families
was more unequal in 2013 than it had been in 1989.
■ In 2013, average wealth for families in the top half of the distribution
was greater than it had been in 1989. The opposite was true for
families in the bottom half.

4. 3CONGRESSIONAL BUDGET OFFICE
Data: Survey of Consumer Finances
■ This study uses data from the Survey of Consumer Finances (SCF),
which:
– Is conducted every three years;
– Includes detailed information on family wealth, income, and pensions;
and
– Covers nearly the full distribution of family wealth (but excludes the
nation’s 400 wealthiest people, as listed by Forbes magazine).
■ CBO supplemented the SCF with aggregate wealth data from Forbes.
■ The study uses the cross-sectional waves in the SCF from 1989
through 2013.
■ The unit of analysis is the family.

5. 4CONGRESSIONAL BUDGET OFFICE
Definition of Wealth
■ The measure of wealth in this study is marketable wealth—the
difference between a family’s assets and its debt.
– Assets consist of financial assets (including 401(k)-type plans and
IRAs), home equity, and other assets (such as real estate, vehicles, and
business equity).
– Debt is nonmortgage debt, which consists of a family’s consumer debt
(including credit card debt and auto loans) and other debt (including
student loans).
– Mortgage debt is subtracted from the value of a family’s primary
residence and is therefore accounted for in the family’s assets.

6. 5CONGRESSIONAL BUDGET OFFICE
Alternative Analytical Approaches and Measures of
Wealth
■ Sources of data
– SCF and the Forbes 400
– Tax data
■ Ways to define wealth
– Marketable wealth
– Nonmarketable wealth

7. 6CONGRESSIONAL BUDGET OFFICE
Holdings of Family Wealth, by Wealth Group
Trillions of 2013 Dollars
1989 1992 1995 1998 2001 2004 2007 2010 2013
0
15
30
45
60
75
Top 10 Percent
51st to 90th Percentiles
Bottom 50 Percent

8. 7CONGRESSIONAL BUDGET OFFICE
Shares of Family Wealth, by Wealth Group
3 3 4 3 3 3 2 1 1
30 29 28 28 27 27 25 24 23
67 67 69 69 70 70 72 75 76
0
20
40
60
80
100
1989 1992 1995 1998 2001 2004 2007 2010 2013
Percent
Top 10 Percent
51st to 90th
Percentiles
Bottom 50 Percent

9. 8CONGRESSIONAL BUDGET OFFICE
Wealth of Families at Selected Percentiles of the Wealth
Distribution
Thousands of 2013 Dollars
1989 1992 1995 1998 2001 2004 2007 2010 2013
0
200
400
600
800
1,000
1,200
90th Percentile
75th Percentile
25th Percentile
50th Percentile

10. 9CONGRESSIONAL BUDGET OFFICE
Average Wealth of Families in the Top 10 Percent of the
Wealth Distribution
Thousands of 2013 Dollars
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,000
1989 1992 1995 1998 2001 2004 2007 2010 2013

11. 10CONGRESSIONAL BUDGET OFFICE
-5
0
5
10
15
20
25
30
35
40
45
50
55
-5
0
5
10
15
20
25
30
35
40
45
50
55
1989 1992 1995 1998 2001 2004 2007 2010 2013
Aggregate Wealth of Families in the Top 10 Percent of the
Wealth Distribution (Excluding the Forbes 400)
Trillions of 2013 Dollars
Other Assets
Financial Assets
Home Equity
Nonmortgage Debt

12. 11CONGRESSIONAL BUDGET OFFICE
-500
0
500
1,000
1,500
2,000
2,500
Home Equity Financial Assets Other assets Debt
Changes in the Assets and Debt of Families in the Top 10 Percent
of the Wealth Distribution (Excluding the Forbes 400)
Thousands of 2013 Dollars
Home Equity Financial Assets Other Assets Nonmortgage Debt
Percentage of Families That Hold Each Category of Asset or Debt
1989 2007 2013 1989 2007 2013 1989 2007 2013 1989 2007 2013
93 97 97 100 100 100 97 98 98 57 59 43
+101%
-24%
+135%
+7%
+87%
-21%
-1% -9%

13. 12CONGRESSIONAL BUDGET OFFICE
Average Wealth of Families in the 51st to 90th Percentiles
of the Wealth Distribution
Thousands of 2013 Dollars
1989 1992 1995 1998 2001 2004 2007 2010 2013
0
50
100
150
200
250
300
350
400
450

14. 13CONGRESSIONAL BUDGET OFFICE
-2
0
2
4
6
8
10
12
14
16
18
20
-2
0
2
4
6
8
10
12
14
16
18
20
1989 1992 1995 1998 2001 2004 2007 2010 2013
Aggregate Wealth of Families in the 51st to 90th
Percentiles of the Wealth Distribution
Trillions of 2013 Dollars
Other Assets
Financial Assets
Home Equity
Nonmortgage Debt

15. 14CONGRESSIONAL BUDGET OFFICE
Changes in the Assets and Debt of Families in the 51st to
90th Percentiles of the Wealth Distribution
–31%+58%
Home Equity Other AssetsFinancial Assets Nonmortgage Debt
99 9910093 9194 97 9596 72 6272
-50
0
50
100
150
200
1989 2007 2013 1989 2007 2013 1989 2007 2013 1989 2007 2013
–8%
+98%
–19%+50%
0%–49%
Percentage of Families That Hold Each Category of Asset or Debt
Thousands of 2013 Dollars

16. 15CONGRESSIONAL BUDGET OFFICE
Average Wealth of Families in the 26th to 50th
Percentiles of the Wealth Distribution
Thousands of 2013 Dollars
1989 1992 1995 1998 2001 2004 2007 2010 2013
0
10
20
30
40
50
60
70

17. 16CONGRESSIONAL BUDGET OFFICE
-1
0
1
1
2
2
3
-0.5
0.0
0.5
1.0
1.5
2.0
2.5
1989 1992 1995 1998 2001 2004 2007 2010 2013
Aggregate Wealth of Families in the 26th to 50th
Percentiles of the Wealth Distribution
Trillions of 2013 Dollars
Other Assets
Financial Assets
Home Equity
Nonmortgage Debt

18. 17CONGRESSIONAL BUDGET OFFICE
Changes in the Assets and Debt of Families in the
26th to 50th Percentiles of the Wealth Distribution
–44%
+51%
Home Equity Other AssetsFinancial Assets Nonmortgage Debt
94 979661 5872 89 9293 77 6978
1989 2007 2013 1989 2007 2013 1989 2007 2013 1989 2007 2013
Percentage of Families That Hold Each Category of Asset or Debt
Thousands of 2013 Dollars
–34%+64% –23%+58%
+10%
–77%
-40
-30
-20
-10
0
10
20
30
40
50

19. 18CONGRESSIONAL BUDGET OFFICE
Average Wealth of Families in the Bottom
25 Percent of the Wealth Distribution
Thousands of 2013 Dollars
1989 1992 1995 1998 2001 2004 2007 2010 2013
-15
-10
-5
0
5
10
15

20. 19CONGRESSIONAL BUDGET OFFICE
-1.0
-0.8
-0.6
-0.4
-0.2
0.0
0.2
0.4
-1.0
-0.8
-0.6
-0.4
-0.2
0.0
0.2
0.4
1989 1992 1995 1998 2001 2004 2007 2010 2013
Aggregate Wealth of Families in the Bottom 25 Percent of
the Wealth Distribution
Trillions of 2013 Dollars
Other Assets
Financial Assets
Home Equity
Nonmortgage Debt

21. 20CONGRESSIONAL BUDGET OFFICE
Changes in the Assets and Debt of Families in the
Bottom 25 Percent of the Wealth Distribution
–247%
+352%
Home Equity Other AssetsFinancial Assets Nonmortgage Debt
64 83809 1814 60 6770 61 6868
1989 2007 2013 1989 2007 2013 1989 2007 2013 1989 2007 2013
Percentage of Families That Hold Each Category of Asset or Debt
Thousands of 2013 Dollars
–7%+99%
–5%+76%
–40%
–114%
-40
-30
-20
-10
0
10
20
30
40
50

22. 21CONGRESSIONAL BUDGET OFFICE
Share of Families in Debt and Average Indebtedness for
Those Families
1989 1992 1995 1998 2001 2004 2007 2010 2013
-50
-25
0
–9
–20
–32
25
50
-20
-10
0
10
20
Average Indebtedness
(Left axis)
Share of Families in Debt
(Right axis)
7 8
12
Thousands of 2013 Dollars Percent

23. 22CONGRESSIONAL BUDGET OFFICE
Changes in Categories of Debt for Families in Debt
■ The increase in average indebtedness between 2007 and 2013 for
families in debt was mainly the result of falling home equity and
rising student loan debt.
2007 2013
Share of families in debt who had negative home equity (Percent) 3 19
Average home equity for families in debt who had negative home equity
(2013 dollars) -$16,000 -$45,000
Share of families in debt who had outstanding student loans (Percent) 56 64
Average student loans for families in debt who had student loans (2013 dollars) $29,000 $41,000

24. 23CONGRESSIONAL BUDGET OFFICE
Age Distribution of Families in Debt and Families Not in
Debt in 2013
44
29
20
7
18
26
30
26
0
10
20
30
40
50
Younger Than 35 35 to 49 50 to 64 65 or Older
Percent
Families In Debt
Families Not In Debt

25. 24CONGRESSIONAL BUDGET OFFICE
Education Distribution of Families in Debt and Families
Not in Debt in 2013
8
26
34
21
1111
32
24
19
14
0
10
20
30
40
50
Less Than High School High School Some College Bachelor's Degree Graduate Degree
Percent
Families In Debt
Families Not In Debt

26. 25CONGRESSIONAL BUDGET OFFICE
Median Family Wealth, by Age Group
Thousands of 2013 Dollars
1989 1992 1995 1998 2001 2004 2007 2010 2013
0
50
100
150
200
250
300
65 or Older
50 to 64
Younger Than 35
35 to 49

27. 26CONGRESSIONAL BUDGET OFFICE
Median Family Wealth, by Education Group
Thousands of 2013 Dollars
Graduate Degree
Bachelor’s Degree
Less Than High School
High School
Some College
0
100
200
300
400
500
1989 1992 1995 1998 2001 2004 2007 2010 2013

28. 27CONGRESSIONAL BUDGET OFFICE
Effects of Aging and Increases in Educational Attainment
on Family Wealth
■ The aging of the population and increases in educational attainment
contributed to an increase in overall family wealth between 1989
and 2013.
■ CBO performed a counterfactual analysis, using a reweighting
technique developed by John DiNardo and colleagues.
– See John DiNardo, Nicole M. Fortin, and Thomas Lemieux, “Labor
Market Institutions and the Distribution of Wages, 1973–1992:
A Semiparametric Approach,” Econometrica, vol. 64, no. 5
(September 1996), pp. 1001–1044, http://tinyurl.com/zyhcdbf.

29. 28CONGRESSIONAL BUDGET OFFICE
Effects of Aging and Increases in Educational Attainment
on Family Wealth (Continued)
■ Had the population not aged as it did, median family wealth would
have been 19 percent lower in 2013 than in 1989.
– In 1989, 21 percent of families were headed by someone over the age
of 65; in 2013, 24 percent were.
■ Had the average educational attainment of families not increased as
it did, median family wealth would have been 16 percent lower in
2013 than in 1989.
– In 1989, 23 percent of families were headed by someone with at least a
bachelor’s degree; in 2013, 32 percent were.