This paper introduces a new long-run dataset based on archival data from historical waves of the Survey of Consumer Finances. The household-level data allow us to study the joint distributions of household income and wealth since 1949. We expose the central importance of portfolio composition and asset prices for wealth dynamics in postwar America. Asset prices shift the wealth distribution because the composition and leverage of household portfolios differ systematically along the wealth distribution. Middle-class portfolios are dominated by housing, while rich households predominantly own equity. An important consequence is that the top and the middle of the distribution are affected differentially by changes in equity and house prices. Housing booms lead to substantial wealth gains for leveraged middle-class households and tend to decrease wealth inequality, all else equal. Stock market booms primarily boost the wealth of households at the top of the distribution. This race between the equity market and the housing market shaped wealth dynamics in postwar America and decoupled the income and wealth distribution over extended periods. The historical data also reveal that no progress has been made in reducing income and wealth inequalities between black and white households over the past 70 years, and that close to half of all American households have less wealth today in real terms than the median household had in 1970.

An extensive empirical literature has documented that workers with high tenure suffer large and persistent earnings losses when they get displaced. We study the reasons behind these losses in a tractable search model with a life-cycle dimension, endogenous job mobility, worker-and match-heterogeneity. The model reconciles key characteristics of the U.S. labor market: large average transition rates, a large share of stable jobs, and the earnings losses from displacement. We decompose the earnings losses and find that only 50% result from skill losses. Endogenous reactions and selection account for the remainder. Our findings have important implications for the welfare costs of displacement and labor market policy. JEL: E24

We compare labour market flows in the US and Germany between 1980 and 2004. In Germany, average worker flows in and out of unemployment are substantially lower; outflows are equally volatile in both countries; inflows are about twice as volatile in Germany and contribute more to the unemployment rate volatility. We explore four candidates for these differences: unemployment benefits; union bargaining power; employment protection and the efficiency of matching unemployed workers to open positions. We find that a lower matching efficiency in Germany can explain the bulk of the cross‐country differences. It amplifies the business cycle and adds persistence.

This paper introduces a new long-run dataset based on archival data from historical waves of the Survey of Consumer Finances. The household-level data allow us to study the joint distributions of household income and wealth since 1949. We expose the central importance of portfolio composition and asset prices for wealth dynamics in postwar America. Asset prices shift the wealth distribution because the composition and leverage of household portfolios differ systematically along the wealth distribution. Middle-class portfolios are dominated by housing, while rich households predominantly own equity. An important consequence is that the top and the middle of the distribution are affected differentially by changes in equity and house prices. Housing booms lead to substantial wealth gains for leveraged middle-class households and tend to decrease wealth inequality, all else equal. Stock market booms primarily boost the wealth of households at the top of the distribution. This race between the equity market and the housing market shaped wealth dynamics in postwar America and decoupled the income and wealth distribution over extended periods. The historical data also reveal that no progress has been made in reducing income and wealth inequalities between black and white households over the past 70 years, and that close to half of all American households have less wealth today in real terms than the median household had in 1970.

The racial wealth gap is the largest of the economic disparities between Black and white Americans, with a white-to-Black per capita wealth ratio of 6 to 1. It is also among the most persistent. In this paper, we construct the first continuous series on white-to-Black per capita wealth ratios from 1860 to 2020, drawing on historical census data, early state tax records, and historical waves of the Survey of Consumer Finances, among other sources. Incorporating these data into a parsimonious model of wealth accumulation for each racial group, we document the role played by initial conditions, income growth, savings behavior, and capital returns in the evolution of the gap. Given vastly different starting conditions under slavery, racial wealth convergence would remain a distant scenario, even if wealth-accumulating conditions had been equal across the two groups since Emancipation. Relative to this equal-conditions benchmark, we find that observed convergence has followed an even slower path over the last 150 years, with convergence stalling after 1950. Since the 1980s, the wealth gap has widened again as capital gains have predominantly benefited white households, and income convergence has stopped.

and potential policy responses to increasing inequality in the United States have recently become a hotly debated topic among policymakers, academics, and pundits of all sorts. In this article, we abstain from entering the debate about policy responses but rather provide a description of inequality in the United States in 2013 as measured by the Survey of Consumer Finances (SCF) to inform the ongoing debate. Essentially, we report, organize, and discuss a snapshot of inequality in 2013 in the United States. We contrast this situation with that of past SCF surveys that go back to 1989 in order to shed some light on the evolution of inequality over the last quarter century. 1 We focus on the inequality of earnings, income, and wealth, and discuss how this inequality is shaped by various characteristics such as age, education, employment status, and marital status. In particular, we focus on the concentration of income and wealth in the hands of the richest households. As part of this discussion, we also provide some new evidence on the contribution of inheritance to the persistence of concentration across generations. Subsequently, we investigate which sources of income and which types of assets are the main contributors to inequality. By focusing on the SCF, which does not include data on time allocation or consumption, we must of necessity ignore how unequally people live, which is a relevant consequence of inequality in income or wealth. Because the SCF is not a panel that tracks people over time, we are not able to discuss the lifetime features of inequality. The SCF is a special survey conducted by the National Opinion Research Center at the University of Chicago and sponsored by the Federal Reserve with the cooperation of the Department of the Treasury. Its sample size of over 6,000 households is appreciably smaller than

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